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THE  PRINCIPLES  OF 
INDUSTRIAL   MANAGEMENT 


THE  PRINCIPLES 
OF  INDUSTRIAL 
MANAGEMENT 


BY 


JOHN    C.  DUNCAN,  M.S.,  Ph.D. 

ASSISTANT  PROFESSOR   OF  ACCOUNTANCY, 
UNIVERSITY  OF  ILLINOIS 


NEW  YORK  AND  LONDON 
D    APPLETON  AND   COMPANY 

1920 


^A  ^n  Q 


Copyright,  1911,  by 
D.  APPLETON  AND  COMPANY 


PRINTED  IN  THE  UNITED  STATES  OE  AMERICA 


lis 


THIS  BOOK  IS  DEDICATED 
TO  ITS  TWO 
MOST  INTERESTED  WELL-WISHERS- 

MY   PARENTS 


PREFACE 


The  writer  has  long  felt  the  need  of  a  scientific  treatment 
of  industrial  management.  Hundreds  of  young  men  are  now 
in  our  schools  and  colleges  intending  to  engage  in  the  world 
of  affairs,  and  it  is  exceedingly  important  that  they  gain  a 
clear  conception  of  the  principles  underlying  the  successful 
conduct  of  industrial  enterprises. 

The  material  in  this  book  is  gathered  from  many  sources. 
Merely  to  mention  the  people  to  whom  the  author  is  indebted 
for  data  within  these  covers  would  fill  several  pages  with 
names.  The  writer  has  endeavored  to  give  full  credit  in  the 
text  for  the  drawings,  plates,  and  diagrams,  and,  unless  ac- 
cidentally overlooked,  all  books  and  articles  from  which  he  has 
received  assistance  have  been  cited.  In  the  text,  however, 
there  is  no  mention  of  his  obligations  to  Judge  Elbert  H.  Gary 
and  Mr.  Richard  Trimble,  of  the  United  States  Steel  Corpora- 
tion, to  Mr.  Wm.  Laughlin,  of  Armour  and  Company,  Mr.  H. 
C.  Folger,  Jr.,  of  the  Standard  Oil  Company,  Mr.  E.  Collins, 
Jr.,  of  the  Sauquoit  Silk  Manufacturing  Company,  Mr.  L. 
A.  Osborne,  Vice-President  of  the  Westinghouse  Electric  and 
Manufacturing  Company,  and  Mr.  H.  E.  Neise,  of  the  Amer- 
ican Sugar  Refining  Company;  so  he  takes  this  opportunity 
to  thank  them  for  their  many  favors.  He  is  further  indebted 
to  his  colleagues  in  the  departments  of  Economics  and  Engi- 

vU 


viii  PREFACE 

neering  of  the  University  of  Illinois,  to  his  former  associates 
at  the  University  of  Pennsylvania  and  Ohio  State  University. 
Professors  E.  H.  Waldo  and  E.  L.  Bogart,  his  colleagues 
at  the  University  of  Illinois,  have  been  very  helpful;  the 
former  read  all  the  chapters  pertaining  to  the  engineering 
matters,  in  addition  to  many  of  the  others.  Professor  Emory 
R.  Johnson,  his  former  teacher  at  Pennsylvania,  read  the 
entire  manuscript,  and  made  many  improvements  in  style 
and  expression.  This  paragraph  would  be  incomplete  with- 
out special  mention  of  his  sister,  to  w^hom  the  writer  is 
indebted  for  the  work  of  preparing  the  manuscript  for  the 
printer.  In  addition  to  that  onerous  task  she  has  given 
many  suggestions  as  to  form,  expression,  and  selection  of 
contents,  which  have  been  of  very  great  assistance. 

In  registering  his  thanks,  however,  the  writer  does  not 
wish  to  have  anyone  but  himself  blamed  for  any  deficiencies 
which  exist  in  the  volume,  as  the  plan  and  treatment  are  his 
own. 

It  is  his  hope  that  the  book  will  be  of  service  to  the  stu- 
dents of  accountancy  as  well  as  to  those  of  general  business. 
The  accountant  should  have  knowledge  of  more  than  the 

*inere  methods  of  making  entries  in  books  and  the  drafting 
of  financial  statements  therefrom.  He  should  be  able  to 
appreciate  the  kind  of  information  which  the  management 
needs,  and  the  extent  to  which  accounting  records  can  gather 
the  various  types  of  information.     The  book  is  written  to 

_giveJboth  the  accountant  and  the  general  student  of  business 
a  brief  presentation  of  the  underlying  principles  of  the  sci- 
ence of  management. 

In  teaching  the  subject  the  writer  has  found  it  exceed- 


PREFACE  ix 

ingly  helpful  to  the  instructor  and  profitable  to  the  student 
to  have  frequent  visits  to  modem  plants  and  then  have  care- 
fully written  reports  presented  which  discuss  those  factors 
which  contribute  to  the  success  of  the  enterprise  or  tend  to 
its  failure.  Such  trips  should  be  made  with  the  teacher  or 
with  some  competent  guide,  and  may  well  be  made  the  basis 
of  interesting  class-room  discussion. 

John  C.  Duncan. 
University  of  Illinois,  Urbana,  III. 


CONTENTS 


PART  I.— THE   ECONOMIC   ENVIRONMENT 
CHAPTER  I 

THE  PROBLEMS 

PAGES 

Introduction — Factors  Affecting  Prosperity  of   Plant — Eco- 
,        nomic    Environment — Manufacturing    and   Distributive 
\       Policy — Organization    and    Management — Problems    of 
)      Business    Management:     (1)    Location   of    Plant;    (2) 
/       Integration  and  Concentration  of  Business  ;  (3)  Special- 
ization ;  (4)  Building ;  (5)  Power ;  (6)  Management ;  (7) 
Selling 3-4 

CHAPTER   II 

GENERAL  THEORY  OF  INDUSTRIAL  LOCATION 

Survey  of  Concentration  and  Localization  of  Industries — 
Reasons  for  Localization — Census  Classification :  (1) 
Materials  ;  (2)  Market ;  (3)  Water  Power ;  (4)  Climate ; 
(5)  Labor  Supply ;  (6)  Free  Capital ;  (7)  Early  Start- 
Four  Primary  Reasons  for  Localization :  (1)  Market ;  (2) 
Raw  Materials;  (3)  Labor;  (4)  Power — Importance  of 
Latter  Factors 5-23 

CHAPTER   III 

THEORY  OF  PLANT  LOCATION 

Factors  Other  than  the  Ideal  Industrial  District  Affecting: 
Success  of  Plant — Location,  Layout,  Equipment — Loca- 
tion with  Respect  to  Selling,  Buying,  Manufacturing — 
Importance  of  Nearness  to  Labor  Population,  Repair 
Shops,  Banking  and  Credit — Considerations  Affectinjfr 


xii  CONTENTS 

PAGES 

Building  of  Plant:  (1)  Special  Needs  of  Industry;  (2) 
Space  for  Expansion ;  (3)  Low  Rent  and  Taxes ;  (4) 
Freedom  from  Restrictive  Ordinances;  (5)  Adequate 
Fire-Fighting  Facilities 24-38 

CHAPTER  IV 

THE  IDEAL  SITUATION 

Country,  City,  and  Suburban  Plant  Situations — Advantages 
and  Disadvantages — Location  of  Plants  Suited  to  Each 
Kind  of  Situation — Extra  Inducements  Offered:  (1) 
Free  Land;  (2)  Free  Building;  (3)  Exemption  from 
Taxation ;  (4)  Stock  Subscription ;  (5)  Cash  Bonus ;  (6) 
Miscellaneous  Favors — General  Rules  for  Location  in 
Any  Situation 39-48 

CHAPTER  V 

BUSINESS  CONCENTRATION  AND  INTEGRATION 

Classes  of  Consolidations:  (1)  Integration  of  Process  from 
Raw  Material  to  Finished  Product ;  (2)  Integration  and 
Concentration  of  Factories ;  (3)  Integration  and  Con- 
centration of  Distributing  Houses ;  (4)  Integration  by 
By-Product  Utilization ;  (5)  Integration  and  Concentra- 
tion by  Control  of  Patents  and  Market  Ownership — 
Illustrations  of  Each  Form  of  Consolidation  Showing 
Types  of  Integration  and  Concentration  Used — Deter- 
mination of  the  Advisable  Type  of  Consolidation.      .      49-70 

CHAPTER  VI 

BUSINESS  SPECIALIZATION 

Growth  of  Specialization — Reasons :  (1)  Reduction  of  Prelim- 
inary Cost ;  (2)  Use  of  Specialized  Equipment ;  (3)  Sim- 
plification of  Managerial  Problems ;  (4)  Greater  Value 
of  Small  Savings — Illustrations  of  Methods  of  Saving— 
The  Interchangeable  Part — Limitations  to  Specializa- 
tion.           71-80 


CONTENTS  xiii 


PART  II.— THE   EQUIPMENT  OF  THE  PLANT 
CHAPTER  VII 

CONTINUOUS  INDUSTRIES,  SYNTHETICAL 

PAGES 

Determination  of  the  Type  of  Plant— Two  Kinds  of  Manu- 
facturing :  (1)  Continuous ;  (2)  Assembling — Classes  of 
Continuous  Industries :  (1)  Synthetical ;  (2)  Analytical 
— A  Continuous  Synthetical  Industry  of  Non-By-Product 
Type — Effect  upon  Plant  Structure — A  Continuous  In- 
dustry of  By-Product  Type— Effect  upon  Plant  Struc- 
ture    81-100 

CHAPTER  VIII 

CONTINUOUS  INDUSTRIES,  ANALYTICAL 

Utilization  of  Cheap  Conveying  Apparatus  by  Analytical  In- 
dustries— Two  Types  of  Analytical  Industries,  Non-By- 
Product  and  By-Product — Non-By-Product  Industry, 
Sugar  Refining — Characteristics  of  a  Sugar-Refining 
Building — Utilization  of  Gravity — Conveying  Apparatus 
in  Flour  Milling — By-Product  Analytical  Industry,  Meat 
Packing — Steps  of  the  Process — Ideal  Layout  for  a 
Packing  House 101-114 

CHAPTER   IX 

ASSEMBLING  INDUSTRIES 

Two  Groups  of  Assembling  Industries :  (1)  Direct  Pro- 
ducing; (2)  Indirect  Producing — Characteristics  of  As- 
sembling Industries — Two  Questions  in  Assembling 
Plant  Layout:  (1)  The  Arrangement  of  Departments; 
(2)  The  Building  of  the  Plant— Direct  Producing  In- 
dustry: Shoe  Manufacturing — Ideal  Layout — Indirect 
Industry :  Ship  Building — Type  of  Machinery  and  Equip- 
ment Needed — Ideal  Layout  for  a  Machine  Shop  and 
Foundry — Ideal  Layout  for  a  Ship  Building  Establish- 
ment        115-134 


xiv  CONTENTS 


CHAPTER  X 

FIRE  PRECAUTION,  AND  ITS  EFFECT  ON  LAYOUT  AND  STRUCTURE 

PAGES 

The  Ideal  Plant — Large  Changes  in  Plant  Layouts  Neces- 
sitated by  Fire  Precautions :  (1)  In  Oil  Refineries ;  (2) 
In  Gas  Works — Causes  of  Fire  :  (1)  Common  Hazards ; 
(2)  Special  Hazards — Fire  Protective  Devices:  (1)  Pre- 
ventives of  Fire ;  (a)  Slow^-Burning  and  Fire-Proof 
Structures ;  (2)  Fire  Extinguishers :  (a)  Automatic 
Sprinklers,  (b)  Fire  Hose,  (c)  Fire  Buckets,  (d)  Chem- 
ical Extinguishers,  (e)  Hand  Buckets;  (3)  Fire  Alarms: 
(a)  The  Watchman  and  the  Time-Recorder,  (b)  Ther- 
mostats— Outside  Fire  Protection:  (1)  Water  Curtains; 
(2)  Fire  Hydrants ;  (3)  Fire  Alarms ;  (4)  Fire  Engines 
— Safety  Devices  for  the  Protection  of  Life:  (1)  Fire 
Escapes ;  (2)  Fire  Drills 135-152 


CHAPTER  XI 

THE  BUILDING  AND   THE  WORKERS 

Five  Essentials  to  Comfort:  (1)  Light;  (2)  Heat;  (3)  Ven- 
tilation ;  (4)  Space ;  (5)  Conveniences — Lighting :  (1) 
Skylight ;  (2)  Windows  ;  (3)  Saw-Tooth  Lights  ;  (4)  Arti- 
ficial Light;  (5)  Elimination  of  Shadows — Heating:  (1) 
Hot  Air ;  (2)  Hot  Water ;  (3)  Steam ;  (4)  Combination 
of  Hot  Air  and  Steam — Humidifiers — Schemes  for  Ven- 
tilation— Importance  of  Sufficient  Space — Toilet  and 
Wash  Rooms 153-162 

CHAPTER  XII 

THE  POWER  PROBLEM 

Water  Power — Advantages  of  Purchased  Power — Other 
Forms  of  Power — Direct  Combustion  and  Indirect  Com- 
bustion Engines — The  Gas  Engine — Two  Types  of 
Steam  Engine:  (1)  Turbine;  (2)  Reciprocating — Econ- 
omies in  a  Steel  Plant:  (1)  Making  Water  Suitable  for 
Steam ;  (2)  Increasing  Boiler  Efficiency ;  (3)  Increasing 
Engine    Efficiency — Comparison  of    Boiler  Compounds 


CONTENTS 


PAGES 

with  Water  Softeners — Economizers  and  Superheaters — 
The  Automatic  Stoker — The  Condenser — Kinds  of  Power 
Transmission:  (1)  Steam;  (2)  Belt;  (3)  Rope  Drive; 
(4)  Electrical ;  (5)  Air  Pressure 163-180 


PART  UI.— ORGANIZATION   AND   MANAGEMENT 
CHAPTER  XIII 

THE  THREE  TYPES  OF  ORGANIZATION 

Duties  of  the  Ideal  Manager — Three  Types  of  Management : 
^I)   Military;    (2)   Functional;    (3)    Departmental — Ad- 
vantages and  Disadvantages  of  Each  Type.      .      .      181-195 

CHAPTER  XIV 

THE  LABOR  FORCE 

Three  Kinds  of  Laborers :  (1)  Men ;  (2)  Women ;  (3)  Chil- 
dren— Male  and  Female  Labor  Compared — Children  as 
Employees — Classes  of  Labor  from  Standpoint  of  Edu- 

.cation  and  Training — Apprenticeship  Systems — Baldwin 

Locomotive  Works — Westinghouse  Manufacturing  Co. — 
.Advantage  in  Training  Apprentices 196-213 

CHAPTER   XV 

THE  PAYMENT  OF  THE  WORKMAN 

Obtaining  the  Maximum  Product — Systems  of  Wage  Pay- 
ment: (1)  Time;  (2)  Piece;  (3)  Gain  Sharing;  (4) 
Premium ;  (5)  Halsey  and  Rowan  Modifications ;  (6) 
Differential  Piece  Rate;  (7)  Emerson;  (8)  Bonus — Dan- 
ger of  Cheap  Labor 214-232 

CHAPTER  XVI 

RECORD  OF  THE  WORKERS 

Necessity  of  Accurate  Records — Work  of  the  Labor  Bureau: 
(1)  Selection  of  Employees;  (2)  Record  of  Their  Status 
— Necessity  of  Considering  an  Employee's  Health,  Age» 


xvi  CONTENTS 

PAGES 

Education,  and  Experience — Sources  of  Information — 
The  Form  Letter — Qualifications  of  a  Good  Employee: 

(1)  Regular  Attendance  ;  (2)  Diligence  ;  (3)  Efficiency — 
Time-Recording  Systems:  (1)  Inboard,  Outboard  Check; 

(2)  Drop  Box  Check;  (3)  Call  Number;  (4)  Distribution 
Check ;  (5)  Recording  Clock — Proof  of  Each  System's 
Accuracy— Record  of  Spoiled  Work 233-261 

CHAPTER    XVII 

RECORD  OF  RAW  MATERIALS 

Direct  and  Indirect  Materials — Care  of  Raw  Materials:  (1) 
Prevention  of  Waste  and  Losses  on  Direct  Material ;  (2) 
Prevention  of  Undue  Expenditures  for  Indirect  Material 
— Consideration  in  Developm.ent  of  the  Greatest  Econ- 
omy: (1)  Market;  (2)  Quality;  (3)  Quantity;  (4) 
Delivery;  (5)  Housing;  (6)  Waste;  (7)  Losses — Depart- 
ments: (1)  Purchasing;  (2)  Testing;  (3)  Receiving  and 
Store-room — The  Perpetual  Inventory — Arrangement  of 
Stock — Prevention  of  Waste  and  Loss — Requisition 
Scheme— The  Budget  System 262-280 

CHAPTER  XVIII 

RECORD  OF  FINISHED  AND  UNFINISHED  GOODS 

Necessity  for  Record  of  Unfinished  Goods — Two  Kinds  of 
Manufacturing:  (1)  For  General  Stock;  (2)  For  Specific 
Contract — Accurate  Records  of  Partly  Finished  Goods — 
The  Production  Order — The  Summary  Cost  Sheet — Rela- 
tion to  the  Production  Order 281-293 

CHAPTER   XIX 

RECORD  OF  EQUIPMENT 

Divisions  of  Equipment:  (1)  Tools;  (2)  Patterns;  (3)  Draw- 
ings and  Plans ;  (4)  Power  Machinery — Arrangement 
and  Classification  of  Tools — Record  of  Patterns — Record 
of  Drawings — Dewey  Decimal  System — Record  of  Ma- 
chines— Types  of  Recording  Instruments — A  Machine 
Inventory  for  Fire  Purposes 294-316 

Index  ...     . 317 


LIST  OF  ILLUSTRATIONS 


PAGE 

Map  of  the  United  States  Showing  Value  of  Products  of 

Manufactures  per   Square   Miles   in  1900 7 

Map    of    the    United    States    Showing    Distribution   of   the 

Population  in  1900 19 

Map  of  a  Portion  of  the  City  of  Philadelphia 27 

Map  of  the  Carnegie  Company  Plants 29 

Map   of    the    United    States    Showing    Properties    of    Sub- 
sidiary Companies   of  United   States    Steel    Corporation 

in  1908 Facing    52 

Map  of  the  United  States  Showing  Refineries  of  the  Standard 

Oil  Company  and  its  Competitors 60 

Diagram  of  Cotton  Manufacture 86 

Diagrams  of  Two  Types  of  Cotton  Manufacturing  Plants 90 

Diagram  Showing  the  Steps  in  Steel  Making 93 

Plan  of  the  Steel  Plant  at  Gary,  Indiana 96 

Sugar  Refinery  Scheme 104 

Plan  of  a  Sugar  Refinery 106 

Plan  of  a  Packing  House Ill 

Bird's-Eye  View  of  the  Plant  of  Armour  &  Co Facing  112 

Shoe  Manufacturing 123 

Horizontal  Boring,  Milling,  and  Drilling  Machine 129 

Plan  of  a  Shipyard 132 

Bird's-Eye  View  of  an  Oil  Refinery Facing  136 

Elevation  and  Plan  of  Slow-Burning  Construction 143 

A  Remarkable  Fire  Test Facing  145 

Interior  of  a  Machine  Shop Facing  154 

A  Ventilation  and  Heating  Plan 157 

Inside  View  of  the  Eureka  Water  Softener 171 

Comparison  of  the  Time-Rate  and  Piece-Rate  Systems 217 

Comparison  of  Halsey  and  Rowan  Premium  Plans 222 

Taylor  Differential  Piece-Rate  System 226 

Emerson  Differential  Piece-Rate  System 228 

^  xvii 


xviii  LIST  OF  ILLUSTRATIONS 

PAGE 

Recording  Clock  with  Cost  Equipment 243 

Workmen's  Monthly  Time  Book 245 

Daily  Analysis  Sheet 246 

Daily  Time  Distribution  Ticket 247 

Monthly  Time  Cost  Sheet 248 

Individual  Contract  Time  Slip 249 

Non-Detachable  Contract  Time  Record  Tag 250 

Detachable  Contract  Time  Record  Tag 252 

Individual  Operation  Time  Slip  for  each  Contract 253 

Monthly  Wage  Record  of  Piece-Worker 254 

Monthly  Memorandum    Card    Showing    Efficiency  of  Piece- 
worker   255 

Individual  Spoiled  Work  Ticket 256 

Permanent  Record  Card  of  Employees 257 

Report  Summarizing  Spoiled  Work  of  Entire  Plant  by  Depart- 
ments   258 

Chart  of  Errors  Showing  Monthly  Efficiencies  of  Departments  259 
Detailed  Monthly  Spoiled  Work  Report  for  each  Department  260 
Index  Record  for  Keeping  Track  of  Customers  and  Wearing 

Qualities  of  Raw  Materials 265 

Purchase  Record  Used  to  Determine  Source  of  Defective  Raw 

Material 267 

Raw  Material  Stock  Record 269 

Works  Requisition  on  Store  Room 274 

Budget  Blank  for  a  Machine  Shop 278 

Record  Slip  Showing  Amount  of  Goods  which  Passed  Through 

a  Department  in  Bulk 284 

Combined  Cost  Ledger  and  Partly  Finished  Goods  Record  for 

Goods  which  Pass  Through  Departments  in  Bulk 286 

Partly  Finished  Goods  Record 288 

Combined  Partly  Finished  Goods  Record  and  Cost  Ledger 290 

Combined  Sales  Record  and  Finished  Goods  Inventory 292 

Pattern  Record  Card 302 

Record  Card  of  a  Bristol  Automatic  Time  Recorder 307 

Chart  of  a  Bristol  Recording  Thermometer  in  a  Heating  Plant  309 

Records  Showing  Output  of  Machines 311 

Machinery  and  Equipment  Record  Card 313 

Plat  Record  of  Machinery  and  Equipment 315 


PART    ONE 
THE   ECONOMIC   ENVIRONMENT 


CHAPTER  I 

THE  PROBLEMS 

Industrial  plants  and  business  houses  of  various  kinds 
grow  and  decay.  Industries  prosper  in  some  sections  of  the 
country,  while  in  others  they  have  either  failed  or  are  living 
a  miserable  existence.  The  census  reports  at  times  show 
certain  territory  having  a  most  remarkable  development  in 
production  which  a  decade  before  was  unknown  in  the  manu- 
facturing world.  Within  the  same  area  industries  pass  from 
one  set  of  owners  to  another.  Frequently  within  a  genera- 
tion, unknown  workmen  advance  to  the  proprietorships  of 
plants.  Great  establishments,  whose  positions  were  once 
impregnable  and  whose  influences  were  enormous,  have  lived 
to  see  their  power  pass  to  other  concerns  prospering  under 
different  regimes. 

Why  do  industries  move  from  one  section  of  the  country 
to  another?  Why  is  it  that  firms  in  the  section  wherein  the 
industries  are  located  rise  and  frequently  fail  after  having 
built  up  a  large  business  and  established  a  national  or  even 
world-wide  reputation? 

The  prosperity  of  an  enterprise  depends  in  general  upon 
four  factors : 

1.  The  economic  environment. 

2.  The  equipment  of  the  plant. 

8.  The  organization  and  management  of  the  plant. 

4.  The  selling  department. 

The  economic  environment  provides  convenient  situations 
which  make  possible  the  cheap  production  and  profitable 
disposal  of  the  goods. 

3 


4      THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

The  equipment  of  the  plant  provides  shelter  for  the  em- 
ployees and  the  tools,  and  also  supplies  mechanical  means 
by  which  the  raw  materials  can  be  changed  into  salable 
products. 

On  the  organization  and  management  of  the  plant  depend 
the  owners'  ability  to  utilize  to  the  best  advantage  their  raw 
materials  and  the  time  of  the  men  they  employ. 

The  selling  department  makes  an  outlet  for  the  goods. 

The  successful  running  of  a  concern  resolves  itself  into 
ten  problems : 

1.  Where  shall  the  plant  be  located? 

2.  To  what  extent  shall  the  business  be  integrated  and 
concentrated? 

3.  To  what  extent  shall  the  enterprise  be  specialized? 

4.  How  shall  the  plant  be  built? 

5.  What  form  of  power  shall  be  employed  to  run  the 
plant? 

6.  What  shall  be  the  basis  of  its  internal  organization? 

7.  How  shall  the  labor  force  be  handled? 

8.  How  shall  the  raw  materials  be  treated? 

9.  How  shall  we  determine  the  efficiency  of  our  equip- 
ment? 

10.  How  shall  the  goods  be  distributed  to  the  consumer? 
This  volimie  will  confine  itself  to  the  discussion  of  the 

industrial  problems,  hence  it  will  consider  only  the  first  nine 
of  the  above  questions.  The  tenth  is  so  important  that  it 
can  be  adequately  handled  only  by  making  it  the  special 
topic  of  another  treatise. 


CHAPTER  II 

GENERAL  THEORY  OF  INDUSTRIAL  LOCATION 

The  census  report  of  1905  shows  that  the  United  States  in 
that  year  produced  nearly  $15,000,000,000  worth  of  manu- 
factured goods.  ^  If  we  tabulate  the  fifteen  most  productive 
states  in  the  order  of  their  rank,  we  find  that  they  arrange 
themselves  as  follows: 

Rank.  State.  Value  of  Products.    Rank.  State,  Value  of  Products. 

1  New  York $2,488,345,579  9 

2  Pennsylvania..  1,955,551,332  10 

3  Illinois 1,410,342,129  11 

4  Massachusetts.  1,124,092,051  12 

5  Ohio 960,811,857  13 

6  New  Jersey...  774,369,025  14 

7  Missouri 439,548,957  15 

8  Michigan 429,120,060 

Total  for  15  States $11,876,919,313 

If  we  exclude  California  and  Missouri  from  the  list,  we 
find  that  the  total  productivity  is  reduced  by  little  more  than 
$800,000,000,  and  that  three  fourths  of  the  entire  manu- 
factured goods  in  the  United  States  are  made  within  states 
having  a  total  area  of  less  than  450,000  square  miles,  less 
than  one  seventh  of  the  entire  area  of  the  United  States, 
excluding  our  insular  possessions. 

If  we  make  an  analysis  by  industrial  districts,  the  fact  is 
brought  out  still  more  prominently,  as  shown  by  the  follow- 
ing table. 

^  Statistical  Abstract  of  the  United  States^  1909,  pp.  192,  193. 

5 


Indiana 

393,954,405 

Connecticut . . . 

369,082,091 

California 

367,218,494 

Minnesota 

307,858,073 

Maryland 

243,375,996 

Rhode  Island.. 

202,109,583 

6     THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 


AREA,  POPULATION  AND  VALUE  OF  MANUFACTURING 
PRODUCTS  FOR  THIRTEEN  SELECTED  INDUSTRIAL 
DISTRICTS,    1905.1 


Industrial  District. 


Area  in 
Sq.  Miles. 


Population. 


Value  of  Products. 


New  York  2 

Chicago 

Philadelphia 

Boston 

Pittsburg  and  Alleghany. 

St.  Louis 

Baltimore 

Cincinnati 

Cleveland 

Buffalo 

Minneapolis  and  St.  Paul 

San  Francisco 

Providence  . . .». 

Total 


702 
500 
501 
502 
198 
206 
246 
151 
200 
201 
155 
203 
154 


5,294,682 
2,116,0003 
1,688,0003 
1,354,653 
722,0003 
716,0003 
610,0003 
498,0003 
492,000  3 
423,390 
472,362 
480,000^ 
344,521 


>,  144,488,093 
970,974,280 
677,781,117 
457,254,360 
383,490,468 
319,709,859 
202,659,272 
203,095,605 
179,184,277 
168,111,658 
161,803,453 
159,033,080 
156,299,965 


3,919 


15,211,608 


5,183,885,487 


Less  than  four  thousand  square  miles  of  territory,  con- 
taining about  15,000,000  people,  produced  more  than  $6,000,- 
000,000  worth  of  manufactured  goods  out  of  the  total  United 
States  production  of  $15,000,000,000.  One  per  cent  of  the 
area  of  the  country,  and  less  than  twenty  per  cent  of  the  pop- 
ulation, created  forty  per  cent  of  the  manufactures. 

A  careful  study  of  the  map  on  the  opposite  page  (Fig.  1) 
will  give  some  idea  of  the  way  industries  are  concentrated 

^  Adapted  from  Census  Bulletin  No.  101,  Industrial  Districts, 
1905,  p.  10.  In  every  instance  the  city  named  includes  many  sub- 
urbs and  surrounding  towns. 

2  New  York  includes  Jersey  City  and  Newark,  N.  J. ,  and  the 
surrounding  towns  in  New  Jersey. 

3  Writer's  estimate  based  on  Statistics  of  Cities  Having  a  Pop- 
ulation  of  Over  30,000,  Special  Reports,  Bureau  of  Census. 

*  Based  on  estimates  of  1904,  as  reported  in  Table  1,  pp.  Ill  to 
113,  Statistics  of  Cities  Having  a  Population  of  Over  30,000,  Special 
Reports,  Bureau  of  Cen^xi^ 


8      THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

into  certain  localities  in  the  United  States.  The  Industrial 
United  States  includes  the  section  north  of  the  Ohio  River 
and  the  Mason  and  Dixon  Line,  and  east  of  the  Mississippi 
River,  with  smaller  sections  like  the  Birmingham  district  in 
Alabama,  the  Pueblo  district  in  Colorado,  and  Kansas  City 
in  Kansas  and  Missouri. 

The  distribution  of  industries  from  the  standpoint  of  the 
nature  of  the  industry,  shows  that  this  great  district  has 
within  it  very  marked  divisions. 

The  little  state  of  Rhode  Island  ranks  first  in  the  produc- 
tion of  silverware  and  jewelry,  second  as  a  manufacturer  of 
worsted  goods,  third  in  dyeing  and  finishing  textiles,  fourth 
as  a  maker  of  cotton  goods.  Connecticut  is  first  in  the 
production  of  eleven  articles,  .t}^ical  products  of  which  are 
needles  and  pins,  ammunition,  brass  work,  corsets,  hard- 
ware, and  cutlery.  Massachusetts  is  preeminently  a  shoe 
and  textile  state.  It  ranks  first  in  the  production  of  cotton 
goods,  woolens,  and  all  kinds  of  shoe  products.  New  York 
holds  the  record  with  twenty-nine  first  places,  including 
clothing,  furniture,  men's  furnishing  goods,  gas,  paper  and 
wood  pulp,  printing  and  publishing,  sugar  refining,  and  a 
number  of  other  less  important  industries.  New  Jersey  is  first 
in  dyeing  and  finishing  textiles,  as  a  producer  of  silk  and  silk 
goods,  and  as  a  manufacturer  of  sewing  machines  and  attach- 
ments. Pennsylvania  holds  first  place  in  nine  departments 
<)f  industrial  activity,  among  which  are  carpet  and  rug  man- 
ufacturing, cars,  coke,  foundry  and  machine-shop  products, 
glass,  iron  and  steel,  petroleum  refining,  and  leather  tanning. 
It  takes  second  place  in  the  rranufacture  of  silk  goods,  print- 
ing and  publishing,  women's  clothing,  electrical  apparatus, 
hosiery  and  knit  goods,  lumber  and  planing-mill  products. 
In  the  refining  of  sugar  it  ranks  third.  Illinois  has  six  firsts, 
including  meat  packing,  agricultural  implements,  bicycles, 
glucose,  and  distilled  liquors.  Ohio  has  three  firsts — clay 
jproducta,  carriages  and  wagons,  and  carriage  and  wagon 


GENERAL  THEORY  OF  INDUSTRIAL  LOCATION        9 

materials;  is  second  in  iron  and  steel,  and  third  in  foundry 
and  machine-shop  products.  The  great  flour  state  is  Minne- 
sota, with  New  York  ranking  second  and  Ohio  third. 

Within  recent  years,  the  Southern  States  have  become 
important  in  the  production  of  certain  lines  of  goods.  Ala- 
bama is  now  fifth  in  the  list  of  the  iron  and  steel  states, 
while  in  the  manufacturing  of  coke  it  gives  place  only  to 
Pennsylvania.  South  Carolina  ranks  second  in  the  produc- 
tion of  cotton  goods,  with  North  Carolina  a  close  third,  both 
having  outclassed  many  northern  rivals  within  a  decade,  and 
both  states  are  still  gaining. 

The  Industrial  map  (Fig.  1)  shows  that  political  boimd- 
aries  are  not  recognized  in  the  world  of  production.  East- 
em  Pennsylvania  is  industrially  different  from  western  Penn- 
sylvania. The  great  forests  in  the  states  of  Wisconsin, 
Michigan,  and  Minnesota  naturally  give  them  first,  second, 
and  third  rank  respectively  as  producers  of  lumber  and  timbei 
products.  Alabama's  development  in  iron  and  steel  is  read' 
ily  accounted  for  because  of  its  vast  deposits  of  ore  and  coal, 
but  the  Southern  States  contain  the  only  cotton-producing 
districts  in  the  country,  yet  the  greatest  cotton-manufacturing 
state  is  Massachusetts.  Illinois  kills  more  cattle  than  any 
other  state,  yet  Pennsylvania  takes  first  rank  in  tanning, 
while  Massachusetts  is  second.  New  York  third,  and  Illinois 
seventh  place.  Montana  is  the  greatest  producer  of  raw  wool 
in  the  country,  yet  Massachusetts  makes  more  woolen  and 
worsted  goods  than  any  other  state  in  the  Union.  Pennsyl- 
vania and  Ohio  are  the  two  greatest  coal  and  natural  gas- 
producing  states  in  the  land,  yet  New  York  is  first  in  the 
production  of  gas  for  illumination  and  heating  purposes. 
Forty  years  ago,  Pennsylvania  was  a  great  iron  and  steel 
producing  state,  because  of  the  great  productivity  of  the  iron 
works  in  its  eastern  portion.  To-day  eastern  Pennsylvania 
is  relatively  unimportant  in  the  iron  and  steel  business.  A 
generation  ago  Ohio  imported  almost  all  of  its  shoes  from 


10    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

the  east.  To-day  Ohio  is  one  of  the  great  ehoemaking  states 
in  the  Union,  giving  place  only  to  Massachusetts,  New  York, 
and  New  Hampshire.^  A  score  of  other  instances  might  be 
cited  wherein  industries  have  changed  their  location.  It 
becomes  evident,  therefore,  that  there  must  be  a  number  of 
factors  which  influence  industrial  location. 

The  twelfth  census  mentions  seven  factors  which  give  rise 
to  the  localization  of  industries :  ^ 

"(1)  Nearness  to  materials,  (2)  Nearness  to  markets, 
(3)  "Water  power,  (4)  Favorable  climate,  (5)  A  Supply  of 
labor,  (6)  Capital  for  investment  in  manufactures,  (7)  Mo- 
mentum of  an  early  start. " 

AVhile  all  of  these  causes  contribute  to  industrial  location, 
there  are  but  four  primary  factors,  viz. :  (1)  Markets,  (2) 
Iiaw  materials,  (3)  Labor,  (4)  Power. 

Climate,  although  sometimes  important,  as  a  rule  has 
little  influence  in  determining  location,  unless  it  acts  in  con- 
junction with  some  or  all  of  the  four  primary  factors,  because 
artificial  means  can  betaken  to  make  a  manufacturing  estab- 
lishment come  up  to  nearly  any  requirement  of  heat,  cold,  or 
moisture. 

The  supply  of  capital  and  the  momentum  of  an  early  start 
each  have  an  important  influence,  but  they  are  secondary 
factors,  because  some  or  all  of  the  four  primary  factors  must 
be  present  in  order  to  give  the  initial  impetus. 

Generally  speaking,  the  most  important  factor  in  the 
determination  of  any  industrial  location  is  the  market,  for 
without  a  means  of  disposing  of  the  goods,  a  business  could 
realize  no  profits.  Consequently  industries  locate  near  the 
markets  when  no  other  factors  are  to  be  considered.  This  is 
noticeable  in  the  iron  industry  in  the  United  States.     In  the 


1  Twelfth  United  States  Census  1900,  Vol.  VII,  Manufactures, 
Part  1,  Table  LXXVI,  pp.  clxxxiv  to  clxxxvii. 
*  Ibid.,  pp.  ccx-ccxiv. 


GENERAL  THEORY  OF  INDUSTRIAL  LOCATION      11 

early  history  of  the  country  the  great  consuming  centers  for 
iron  were  the  cities  and  districts  scattered  along  the  Atlantic 
coast.  Boston,  New  York,  Philadelphia,  Baltimore,  and 
many  other  smaller  to^\Tis  were  the  iron  users.  The  Eastern 
States  had  then,  and  still  have,  considerable  deposits  of 
valuable  iron  ore.  The  Schuylkill  Valley  was  an  especially 
favored  district  in  ttiat  respect.  It  possessed  access  to  iron 
ore,  anthracite  coal,  and  limestone.  Blast  furnaces,  rolling 
mills,  and  other  kinds  of  iron  works  filled  the  entire  valley. 
A  great  nmnber  of  the  subsidiary  industries  found  a  profita- 
ble situation  in  that  locality.  The  Schuylkill  Canal  offered 
cheap  water  transportation  for  the  iron  to  Philadelphia,  from 
which  city  it  was  easily  distributed  by  rail  and  water  to  the 
consuming  points  along  the  eastern  coast. 

Sixty  years  ago,  people  knew  that  western  Pennsylvania 
had  rich  deposits  of  iron  ore,  coal,  and  limestone.  In  1856, 
no  less  than  twenty-one  furnaces  in  Pennsylvania  had  demon- 
strated that  the  western  coals  could  be  used  for  iron  making.  ^ 
Long  before  that  time,  however,  nature  had,  by  the  gift  of  an 
ideal  location,  destined  Pittsburg  to  be  the  great  iron  city. 
Three  navigable  rivers  make  a  fortune  building  trinity  for 
Pittsburg.  Two  streams,  flowing  from  opposite  directions, 
bring  the  raw  materials  together  at  a  point  where  they  can 
readily  be  changed  into  finished  products ;  while  the  third 
river,  formed  by  the  union  of  the  other  two,  flows  through 
one  of  the  richest  valleys  in  the  world,  and  affords  a  natural 
highway  for  the  distribution  of  iron  products.  The  develop- 
ment of  the  Ohio  Valley  has  also  been  hastened  by  the  pres- 
ence of  gas,  which  supplied  the  most  perfect  fuel  known  for 
the  mere  cost  of  tapping  the  ground. 

After  the  Civil  War,  the  great  extension  of  railways 
through  the  West  made  such  a  tremendous  market  for  iron 
and  steel  products  that  Pittsburg,  with  its  favorable  location, 

*  Cf.  Tenth  United  Stata^  Census,  ^t^tistica  of  ManufactureSj^ 
Uqh  ftnd  StX^^l,  fi.  118. 


12    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

became  known  the  world  over  as  the  Iron  City.  Indeed,  the 
great  demands  of  the  railroads  for  rails  caused  eastern  man- 
agers and  proprietors  to  start  plants  west  of  the  Alleghenies. 
In  the  early  nineties  the  Lackawanna  Steel  Company  moved 
its  entire  plant  from  eastern  Pennsylvania  to  the  lower  lake 
port  of  Buffalo. 

Second  in  importance  to  the  market  for  the  development 
of  an  industry  is  the  location  of  the  raw  materials.  Pitts- 
burg was  not  a  great  iron  city  until  it  had  a  market  outlet. 
The  Schuylkill  Valley  failed  to  produce  steel  and  iron  for  the 
West,  because  the  situation  of  Pittsburg  in  relation  to  the 
raw  materials  is  far  superior  to  that  of  eastern  Pennsylvania. 
It  costs  less  as  a  rule  to  transport  finished  steel  products  than 
it  does  to  transport  the  raw  materials,  notwithstanding  the  fact 
that  freight  rates  on  finished  goods  are  usually  much  higher 
than  on  raw  materials.  The  reason  for  this  is  that  a  compa- 
ratively small  percentage  of  the  raw  material  is  transported 
when  the  product  is  completed.  To  manufacture  one  ton  of 
pig  iron,  the  Edgar  Thomson  Plant  of  the  Carnegie  Steel 
Company,  Pittsburg,  requires  in  their  blast  furnace  17  cwt. 
of  coke,  10  cwt.  of  limestone,  and  32.2  cwt.  of  iron  ore.^ 
In  other  words,  to  transport  raw  material  to  within  a  prox- 
imity of  the  market  requires  the  paying  of  freight  on  two 
and  one  half  tons  of  material,  of  which  only  one  ton  is 
salable. 

If  a  market  is  accessible  and  all  other  things  are  equal, 
a  plant,  to  secure  its  greatest  advantages,  will  always  find  it 
desirable  to  locate  near  raw  material,  where  raw  material  is 
an  important  element  in  the  cost. 

In  1852,  there  were  shipped  from  Marquette,  Mich.,  six 
barrels  of  iron  ore.^      The  amount  was    insignificant,  but 

*  "An  Outline  of  the  Metallurgy  of  Iron  and  Steel,"  by  A. 
Humbolt  Sexton,  p.  146. 

2  "The  Honorable  Peter  White,"  by  Ralph  D,  Williams,  p.  57, 
The  Penton  Publishing  Coropanyi  1905, 


GENERAL  THEORY  OP  INDUSTRIAL  LOCATION      13 

it  was  the  forerunner  of  one  of  the  most  important  develop- 
ments in  the  iron  and  steel  industry.  It  revealed  to  the 
world  a  source  of  raw  material  that  was  destined  to  give  the 
United  States  first  rank  in  this  field.  By  1889,  the  Lake 
Superior  region  produced  more  than  seven  and  one  half 
million  tons  of  ore  out  of  the  fourteen  and  one  half  million 
total  of  the  United  States. ^  In  1907,  nearly  52,000,000  tons 
of  ore  were  produced  in  this  country;  and,  of  that  quantity, 
the  upper  lake  regions  contributed  nearly  42,000,000  tons.^ 
The  source  of  the  raw  material  is  1,000  miles  from  Pittsburg, 
yet  the  deposits  are  so  situated  and  so  rich,  and  the  lakes 
afford  such  excellent  means  of  transportation  that  the  total 
cost  of  mining  and  of  carrying  the  ore  to  Pittsburg  is  less 
than  $2.00  per  ton.  After  paying  all  the  expenses,  provid- 
ing for  reserves  and  sinking  funds,  these  ores  sell  in  the 
Lower  Lake  Ports  for  from  $4.00  to  $5.00  per  ton,  depending 
on  their  quality.^ 

Why  did  not  the  cities  about  the  Northern  Lake  become 
great  manufacturers  of  iron  products  when  they  have  such 
great  deposits  of  ore  near  at  hand?  Ore  is  only  one  element 
in  the  production  of  iron  and  steel.  Many  attempts  were 
made  to  turn  the  iron  ore  into  finished  products  at  the  mines, 
so  as  to  compete  with  the  Pittsburg  iron,  but  that  city  was 
near  the  market  and  the  price  of  coke  was  so  high,  due  to 
the  expense  of  transporting  it  to  the  North,  that  the  northern 
lake  ports,  long  before  the  eighties,  found  that  their  great 
future  was  to  be  in  the  shipping  of  iron  ore  and  not  in  the 
making  of  iron.  For  a  long  time,  the  mammoth  vessels  that 
carried  the  ore  to  the  lower  lake  ports  had  to  return  without 
cargo.     Later  it  was  found  that  coal  could  be  transported 

^  Mineral  Resources  of  the  United  States,  1903,  pp.  41  and  45. 

2  Ibid.,  1908,  Vol.  I,  Metallic  Products,  p.  64.  The  year  1907  is 
selected  because  it  was  more  nearly  normal  in  its  production 
than  1908. 

a  Ibid.,  1908,  Vol.  I,  Metallic  Products,  pp.  71,  72,  and  77. 


14    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

northward  in  the  otherwise  empty  holds,  and  iron  and  steel 
could  be  made  at  a  profit  in  these  upper  ports  for  the  great 
northwest  markets  as  long  as  the  coal  transported  merely 
took  up  the  otherwise  vacant  space  in  the  vessels. 

The  Steel  Trust,  about  three  years  ago,  announced  its  in- 
tention of  building  a  large  plant  in  the  vicinity  of  Duluth, 
in  order  to  provide  steel  products  for  the  northwestern 
market. 

After  Pittsburg  lost  its  supremacy  in  the  production  of 
iron  ore,  blast  furnaces  and  steel  plants  gradually  moved 
from  the  meeting-place  of  the  Monongahela  and  Alleghany 
Rivers  to  the  cities  along  the  lower  lakes.  Buffalo,  Cleve- 
land, and  Chicago  have  become  very  important,  while  Pitts- 
burg, although  still  increasing  its  output,  is  losing  its  pre- 
eminent position.  In  June,  1908,  the  Iron  Age  records  the 
construction  of  the  greatest  steel  plant  in  the  world  at  Gary, 
Indiana,  a  few  miles  east  of  Chicago.  That  plant  is  located 
at  the  lower  end  of  Lake  Michigan,  where  the  ore  is  taken 
directly  from  the  boat  to  the  furnace  without  any  intervening 
railway  service.  In  this  way  the  new  Indiana  city  is  located 
near  the  market  and  the  raw  material. 

Labor  and  power  are  not  so  important  in  determining  the 
location  of  plants  in  the  iron  and  steel  industries  as  they  are 
in  some  others;  because  of  two  factors : 

1.  The  inventive  genius  of  the  American  has  been  able 
to  devise  so  much  labor-saving  machinery  that  the  large 
majority  of  the  operations  have  become  almost,  if  not  quite, 
automatic. 

2.  Coal  and  gas  are  raw  materials  for  iron  and  steel. 
They  likewise  make  power.  Hence  the  iron  and  steel  indus- 
tries when  locating  near  raw  materials  are  bound  to  locate 
near  power. 

The  extensive  use  of  machines  makes  possible  the  pay- 
ment of  high  wages  without  the  reduction  of  profits.  Labor 
thua  can  be  brought  to  any  vicinity  where  accessibility  to 


GENERAL  THEORY  OF  INDUSTRIAL  LOCATION      15 

raw  material  and  market  make  a  location  desirable  for  steel 
making. 

The  textile  industries  are,  on  the  other  hand,  but  slightly 
affected  by  the  source  of  raw  materials  as  is  shown  from  the 
following  tables,  the  first  of  which  shows  the  production  of 
raw  wool :  ^ 


State. 

Rank  in 
Value. 

Value. 

Rank  in 
Pounds. 

Pounds. 

Montana 

1 

2 
3 

4 
5 
6 
7 
8 
9 
10 

$5,911,920 
5,644,800 
3,182,400 
2,945,250 
2,673,000 
2,659,800 
2,231,460 
2,208,000 
1,854,020 
1,411,200 

2 
1 

8 
3 
4 
5 
6 

10 
7 
9 

32,200,000 

Wyoming 

Ohio 

Idaho  

New  Mexico 

Oregon 

Utah 

36,000,000 
13,000,000 
17,500,000 
16,500,000 
16,500,000 
14,700,000 

Michigan 

California 

Colorado 

9,600,000 
13,300,000 
10,500,000 

Another   bulletin   shows   the   following  with   regard  to 
cotton :  ^ 


State. 

Rank  in 
Value. 

Value. 

Rank  in 
Bales. 

Bales. 

Texas 

1 

2 
3 
4 
5 
6 
7 
8 
9 
10 

$192,609,640 
101,867,948 
84,725,223 
69,065,372 
81,964,522 
52,136,939 
34,948,317 
33,875,637 
24,221,407 
17,481,097 

1 

2 
3 

4 
5 
6 
7 
8 
9 
10 

3,793,518 

Georgia 

2,027,144 

Mississippi 

Alabama 

South  Carolina. . . 
Arkansas 

1,668,556 
1,369,841 
1,242,012 
1,027,714 

Oklahoma 

North  Carolina. . . 

Louisiana 

Tennessee 

728,779 
701,356 
493,467 
349,725 

Total,  10  States 

$672,896,102 

13,402,112 

Total,  United  States .    . 

$681,230,956 

13,553,283 

*  Statistical  Abstract  of  the  United  States,  1908,  pp.  142,  143. 

'  Census  Bulletin  No.  100,  Cotton  Production  in  1908,  pp.  7,  8» 

17  and  18. 

3 


16    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

The  ten  largest  woolen  manufacturing  states  in  the  United 
States  are  many  hundred  miles  removed  from  the  sources  of 
raw  materials :  ^ 


State. 


Massachusetts. . 
Pennsylvania. . . . 

Rhode  Island 

New  York 

Connecticut 

New  Jersey 

Maine 

New  Hampshire. 

Vermont 

Ohio 


Rank. 


1 
2 
3 

4 
5 
6 
7 
8 
9 
10 


f'      Total,  10  States 

r      Total,  United  States. 


Value  of 
Woolen  Products. 


$109,612,579 
83,054,561 
52,640,763 
38,880,819 
18,899,937 
18,142,520 
17,972,569 
14,284,480 
4,698,405 
3,586,528 


$361,773,161 
380,934,003 


Of  the  entire  ten  wool-growing  states,  Ohio  is  the  only 
one  among  the  ten  leading  manufacturing  states.  The  total 
value  of  the  combined  manufacturing  output  of  the  other 
nine  of  the  wool-growing  states  makes  a  simi  of  $3,572,428, 
of  which  amount  California  gave  $823,239;  Oregon,  $1,142,- 
356;  Michigan,  $1,338,493,  and  Utah,  $268,340.  Ohio,  with 
its  comparatively  small  output  in  woolen  manufactures,  made 
over  $14,000  worth  of  woolen  manufactures  more  than  the 
combined  efforts  of  all  the  other  great  wool-growing  states.  ^ 

From  a  study  of  the  above  tables  it  is  evident  that  the 
position  of  the  source  of  raw  materials  have  small  influence  in 
determining  the  location  of  woolen  industries.  The  presence 
of  a  good  market  is  likewise  not  so  important,  as  is  evidenced 
by  the  fact  that  the  middle  west  is  the  home  of  millions  of 
people,  and  yet  only  one  commonwealth  finds  a  place  in  the 
list  of  the  first  ten  manufacturing  communities. 


1  Adapted  from  Table  45,  Census  Bulletin  No.  74,  pp.  130-137 
«  Census  Bulletin  No.  74,  pp.  130-137. 


GENERAL  THEORY  OF  INDUSTRIAL  LOCATION      17 


In  1905  the  ten  leading  cotton  manufacturing  states  were : 


state. 

Rank. 

Value  of 
Product. 

Bales 
Consiimed.2 

Spindles.  3 

Massachusetts. . . 
South  Carolina. . 
North  Carolina. . 
Georgia 

1 
2 
3 
4 

5 
6 

7 

8 

9 

10 

$129,171,449 
49,437,644 
47,254,054 
35,174,248 
30,628,843 
29,540,770 
24,136,813 
18,239,155 
16,760,332 
15,405,823 

906,100 
555,467 
497,947 
402,652 
161,583 
260,928 
49,442 
88,921 
198,820 
130,949 

8,411,249 
2,864,092 
1,880,950   - 
1,316,573 

Rhode  Island  . . . 
New  Hampshire. 

Pennsylvania 

Connecticut 

Alabama 

2,049,522   , 
1,301,281   '• 

266,097 
1,149,915  > 

758,087 

Maine 

891,246 

Total,  10  States 
Total,  United  S 

tates . . 

$395,749,131 
442,451,218 

3,252,809 
3,629,085 

20,889,012 
23,155,613 

Comparing  the  tables  showing  the  cotton-growing  and 
those  listing  the  cotton-manufacturing  states,  there  does  seem 
to  be  some  connection  between  the  raw  material  producing 
sections  and  those  which  manufacture.  Is  it  a  mere  co- 
incidence? Why  does  Massachusetts  produce  more  than 
two  and  one-half  times  as  much  cotton  goods  as  does  its 
nearest  rival  state,  South  Carolina?  Evidently  other  factors 
than  raw  material  must  be  considered  in  locating  textile 
industries. 

The  woolen  industries  in  the  United  States  in  1905  pro- 


1  Census  Bulletin  No.  74,  p.  61. 

2  Ibid. ,  Table  9,  p.  42.  Pennsylvania  owes  its  position  to  the  im- 
portance of  weaving.  Much  yam  is  brought  into  the  state.  New 
York  consumed  a  larger  number  of  bales  of  cotton  than  did  either 
Connecticut  or  Pennsylvania.  Maryland,  including  Delaware,  con- 
sumed a  greater  number  than  did  Pennsylvania,  viz..  New  York, 
99,297  bales,  and  Maryland,  including  Delaware,  used  55,429  bales. 
Table  9  of  Bulletin  No.  74  excludes  Sea  Island  Cotton. 

^Bulletin  No.  74,  Table  16,  p.  51;  New  York  and  New  Jersey 
exceed  Pennsylvania  in.  ni^rflb^r  pf  spindles.  New  York,  704,643 ; 
New  Jersey,  436,764. 


18    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

duced  goods  to  the  value  of  $380, 934, 003,  ^  and  New  England 
made  $218,108,733  worth,  while  New  York,  Pennsylvania, 
and  New  Jersey  made  goods  to  the  value  of  $140,077,900.2 
Southern  New  England,  New  York,  New  Jersey,  and  Penn- 
sylvania made  $358,000,000  worth  of  goods  out  of  a  total 
production  of  $381,000,000— nearly  94  per  cent. 

The  silk  industry  shows  a  like  development,  as  indicated 
by  the  following  table : 


State. 

Bank. 

Value  of  Product, 

excluding 

Duplications.^ 

Consumption 

of  Raw  Silk. 

(Pounds.)* 

Number  of 
Spindles.* 

New  Jersey 

Pennsylvania 

New  York 

Connecticut 

Massachusetts 

Rhode  Island 

Illinois 

1 

2 
3 
4 
5 
6 
7 
8 

$41,066,556 

31,061,188 

19,114,170 

13,981,394 

6,471,206 

2,494,186 

575,932 

332,649 

3,436,279 

3,553,090 

3,970,044 

1,006,793 

1,320,509 

739,004 

262,112 

78,100 

46,255 

596,876 

527,409 

1,203,617 

251,367 

196,624 

107,787 

22,644 

11,880 

California 

All  other  States.. 

3,846 
128,414 

Total,  United  S1 

Total,    S.    New 

N.Y.,  N.J.  & 

.ates . . 
Eng., 
Penn. 

$118,533,560 
114,188,700 

11,572,783 
10,851,552 

2,453,588 
2,309,448 

The  Textile  Industries  seek  their  location  for  other  reasons 
than  raw  material.  The  population  maj)  (Fig.  2)  shows 
that  the  great  textile  states  are  located  in  the  densest  popu- 
lation zone  of  this  country.  A  large  population  offers  two 
great  advantages  to  most  industries,  viz. :  a  profitable  market 
and  abundant  labor.  The  fiber  industries  are  peculiarly 
susceptible  to  lalDor  conditions  in  that,  to  run  successfully, 
they  must  be  near  a  la^ge  supply  of  cheap  labor  which  pos- 
sesses sufficient  training  to  attend  the  various  kinds  of 
machines.  In  large  centers  of  population  women  and  chil- 
dren can  be  employed  to  advantage  in  all  kinds  of  textile 

1  Census  Bulletin  No.  74,  Table  1,  p.  97. 

«Ibid.,  adapted  from  pp.  130-137. 

3  Ibid. .  p.  172,         ■>  Ibid. .  p,  174.,         *  Ibid. ,  p.  183. 


20    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

plants.  They  are  quick  to  learn  and  have  an  innate  dex- 
terity which  enables  them  to  handle  the  light  fibers  rapidly 
and  deftly. 

Prior  to  the  Civil  War,  the  Southerners  were  an  agricul- 
tural people.  The  ruling  classes  discouraged  the  introduction 
of  industrial  arts,  save  as  they  were  necessary  to  meet  local 
demands.  Before  1880,  there  had  been  attempts  to  spin  and 
weave  cotton,  but  in  the  year  1881  the  Governor  of  Georgia 
appeared  at  the  Atlanta  Cotton  Exposition  dressed  in  a  suit 
of  cotton  goods,  the  material  of  which  had  the  same  morning 
been  growing  on  the  plant  stalks.  ^  This  rather  spectacular 
demonstration  called  attention  to  the  fact  that  the  South 
could  manufacture  as  well  as  grow  cotton.  When  the  people 
awakened  to  the  fact  that  they  could  manufacture  the  goods, 
they  discovered  that  the  country  possessed  a  hitherto  un- 
recognized class  of  people  who  would  make  excellent  laborers. 
Mr.  August  Kohn  in  his  work,  "The  Cotton  Mills  of  South 
Carolina,"  gives  a  very  virid  description  of  the  methods 
taken  to  secure  laborers  for  the  mills  of  his  state.  The 
mountain  sections  of  South  Carolina,  North  Carolina, 
Georgia,  and  Tennessee,  have  been  for  many  years  a  fruitful 
source  of  labor.  ^  So  great  were  the  advantages  offered  to 
these  mountaineers  over  their  old  conditions  that  they  came 
down  into  the  cotton  mills  by  the  scores  and  hundreds.  On 
the  other  hand  the  labor  was  so  profitable  that  many  South- 
erners who  started  up  mills  made  such  large  profits  that 
Northern  capital  began  to  invade  the  Southern  field.  The 
mills,  as  a  consequence,  were  so  greatly  increased  in  number 
and  size  that  labor  has  begun  to  become  scarce  and  wages 
are  rapidly  rising.  The  following  tables  are  quoted  from 
Mr.  Kohn's  report: 

^Cf.  Twelfth  Census  of  the  United  States,  Vol.  IX,  Manufac- 
tures, Part  III,  p.  28. 

2 "The  Cotton  Mills  of  South  Carolina,"  by  Au^st  Kohn. 
Issued  by  South  Carolina  Department  of  Agriculture,  Commerce 
and  Immigration,  E.  J.  Watson,  Commissioner,  pp.  23-25. 


GENERAL  THEORY  OF  INDUSTRIAL  LOCATION     21 


TYPICAL  MILL,    1902. ' 


Pay  Roll, 
two  weeks. 

Men. 

Women. 

Children. 

Total  Era- 
ployed. 

Average 
per  day. 

Carding 

$572.09 

705.35 

204.68 

1,800.93 

1,190.06 

50.40 

158.81 

323.97 

213.59 

46 

30 

3 

84 
1 
4 
15 
25 
23 

13 
21 
4 
78 
11 

7 
46 
27 

"i' 

'"5" 

66 
97 
34 

162 
13 
4 
20 
25 
23 

$0.72 
0  60  tV 

Spinning 

Spool,  and  Warp.. 
Weaving 

0.50 
0.92§ 
0.76J 
1,05 

Drawing 

Slasher 

Cloth  Room 

Machine  Shops. . . 
Outdoor  Labor. . . 

0.66i 

1.08 

0.77 

Total 

$4,148.68 

231 

127 

86 

444 

$0.78f 

THE    SAME   MILL   IN   1907. 


Pay  Roll, 
two  weeks. 

Men. 

Women. 

Children. 

Total  Em- 
ployed. 

Average 
per  day. 

Pick,  and  Carding 

Spinning 

Dressing,  Spooling 
Weaving 

$1,269.45 
1,442.80 
533.25 
2,118.55 
342.55 
321.70 
326.25 

100 
45 

22 
144 
21 
21 
36 

11 
35 
40 

42 
15 

14 

77 

'io' 

125 
157 
62 
186 
46 
21 
36 

$1.15 
1.06 
1.02 
1.30 

Cloth  Room 

Machine  Shop 

Other  Labor 

0.83 
L39 
0.91 

Total 

$6,354.55 

389 

143 

101 

633 

$1.13   , 

Market  and  labor  are  the  two  dominating  factors  which 
determine  the  location  of  textiles.  If,  in  addition,  there  are 
other  inducements  offered,  such  as  proximity  to  raw  materials 
or  cheap  power,  the  industry  which  can  take  advantage  of 
these  added  factors  will  be  the  one  to  move  to  the  favored 
section.  Cotton  is  the  textile  which  has  the  added  advan- 
tage, and  hence  its  move  southward  while  the  others  remain 
in  their  old  locations  wherein  they  have  the  advantages  of 
good  market  and  abundant  labor  supply. 

An  important  factor  in  the  early  manufacturing  develop- 


*  "Cotton  Mills  of  South  Carolina,"  p.  33, 


22    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 


merit  of  New  England  was  the  presence  of  a  very  considerable 
amount  of  water  power.  In  1905,  Massachusetts  alone  con- 
sumed nearly  77,000  water  horse  power  in  turning  the  wheels 
of  her  textile  mills. -^ 

' '  The  preeminence  of  Minneapolis  in  the  manufacture  of 
flour  and  grist-mill  products  is  due  princij^ally  to  the  early 
utilization  of  the  water  power  furnished  by  the  Falls  of  St. 
Anthony. "  ^  In  New  York  the  Chemical,  Wood  Pulp,  and 
Power  plants  of  Niagara  Falls  owe  their  existence  solely  to 
the  presence  of  nature's  great  marvel  located  at  that  point. 

The  wood-pulp  industry  is  a  conspicuous  example  of  one 
wherein  power  plays  an  important  part  in  locating  the  estab- 
lishment. The  following  table  has  been  compiled  from  the 
Census  Report  of  1905 :  ^ 


State. 

Paper  and 
Wood  Pulp 

Produc- 
tion. Tons. 

1905.4 

Rank 

in 
Pro- 
duc- 
tion. 

Total 

Water 

H.  P. 

Consumed 

in  State.  5 

Total 
Water 
H.  P.  Con- 
sumed in 
Paper  and 
Wood 
Pulp.  6 

Total  other 

Power 

Consumed 

in  Paper 

and  Wood 

Pulp.7 

Percentage 
of  Water 

Power  used 

in  Paper 

and  Wood 

Pulp. 

New  York . . . 

Maine 

Wisconsin 

New  Hamp. . 

Penna  

Vermont 

Virginia  

Michigan  . . . . 

Oregon 

Ohio 

606,014 

456.921 
241,537 
173,888 
83,114 
60,747 
42,307 
38,612 
31,549 
29,274 
28,695 
28,445 

1 

2 
3 

t 

6 

7 

8 

9 

10 

11 

12 

446,134 

203,094 

112,665 

100,274 

50,620 

76,237 

25,946 

39,342 

20,660 

18,149 

6,404 

183,427 

325,472 

116,508 

83,138 

35,684 

6,631 
36,697 

3,760 
12,655 
10,982 

4,190 

1,310 
51,843 

70,430 

47,563 
24,870 
14,644 
49,459 

6,976 

4,460 
18,765 

1,753 
32,999 

3,266 
55,177 

82.2 

7L0 
76.9 
70.9 
11.8 
84.0 
45.7 
40.2 
86.2 

n.2 

West  Va 

Mass 

28.6 
48.4 

Tot.  12  States 
Total,  U.  S.. 

1,821,103 
1,921,768 

1,282,952 
1,647,969 

688,870 
717,989 

330,362 
404,575 

67.5 
63.9 

1  Census  Bulletin  No.  53,  p.  48. 

«Ibid.,  No.  46,  p.  16.  ^ibid..  No.  80,  p.  26. 

*  Adapted  from  Census  Bulletin  No.  80,  p.  26. 

*  Census  Bulletin  No.  88,  p.  18. 

•Adapted  from  Census  Bulletin  No.  80,  Table  19,  pp.  32-43. 
'  Ibid.  J  includes  steam,  gas,  gasoline,  and  electric  power. 


GENERAL  THEORY  OP  INDUSTRIAL  LOCATION  23 

Water  power  is  usually  the  cheapest  source  of  energy  that 
a  plant  of  any  kind  may  possess,  and  the  above  table  reveals 
its  importance  as  a  primary  factor  in  locating  the  paper 
plants.  It  is  a  significant  fact  that  the  great  paper  states  in 
the  above  table  which  do  not  use  water  power  are  in  the 
vicinity  of  abundant  supplies  of  fuel.  In  Oregon,  where 
waterfalls  yield  more  than  86  per  cent  of  the  power  of  the 
paper  mills,  the  output  has,  since  1900,  increased  from  1, 154 
tons  to  its  present  total  of  31,549  tons.* 

Seldom,  indeed,  does  it  happen  that  the  existence  of  any 
one  of  the  primary  factors  determines  an  industrial  location. 
If,  however,  there  is  a  combination  of  two  or  more  of  those 
influences,  we  have  ground  prepared  for  the  development  of 
industries,  and  the  ones  which  will  permanently  flourish  in 
the  favored  districts  will  be  those  which  can  count  the  great- 
est number  of  desirable  primary  factors. 

^  Adapted  from  Census  Bulletin  No.  80,  Table  19,  p.  26. 


CHAPTER  in 

THEORY   OF   PLANT  LOCATION 

In  every  manufacturing  center,  plants  are  erected  and  run 
by  many  different  corporations.  A  number  of  years  may  pass 
by,  and  at  the  end  of  that  time  some  of  the  plants  will  be 
doubled  in  size,  a  few  will  retain  their  old  dimensions,  while 
still  others  will  have  passed  out  of  existence.  Pittsburg,  for 
instance,  is  a  great  location  for  the  iron  and  steel  industries, 
yet  there  have  been  many  individual  failures  in  that  district 
— failures  not  altogether  due  to  incompetence. 

The  city  of  Philadelphia  is  an  ideal  textile  center,  yet  in 
that  place  there  are  dozens  of  plants  which  have  gone  to  the 
wall,  and  not  through  actual  bad  management.  A  number  of 
carpet  mills  located  in  certain  sections  of  the  district  of 
Kensington  have  been  actually  forced  out  of  their  location 
because  of  the  increasing  value  of  the  sites  on  which  they 
stand.     --^^'^- 

In  another  section  of  Philadelphia  is  a  conspicuous  exam- 
ple of  the  working  out  of  this  tendency.  In  1885,  M.  W. 
Baldwin  built  his  locomotive  shop  at  the  comer  of  Broad  and 
Hamilton  Streets,  a  situation  then  on  the  outskirts  of  Phila- 
delphia. As  years  went  by.  Broad  Street,  in  that  vicinity, 
saw  the  location  of  a  number  of  other  plants,  and  it  likewise 
saw  the  building  up  of  a  large  number  of  residences  and 
other  structures.  At  the  present  time  this  district  is  in  the 
center  of  the  city,  and  property  values  are  enormous.  The 
works  cannot  expand  within  this  district  save  at  a  tremen- 
dous cost.  By  the  year  1900  the  plant  had  completely  out- 
grown itg  boimds  within  the  central  part  of  the  city,  and  had 

24 


THEORY  OF  PLANT  LOCATION  25 

established  part  of  the  works  along  the  Philadelphia  and 
Reading  Railroad  in  the  vicinity  of  Twenty-eighth  and 
Brown  Streets.  There  again,  however,  expansion  became  too 
costly,  so  finally  the  company  has  purchased  a  tract  of  land, 
184  acres  in  extent,  at  Eddystone,  Penn.,  a  small  town 
about  twenty  miles  from  the  center  of  Philadelphia.  In  this 
new  location  the  firm  has  erected  extensive  foundries,  smith 
shops,  and  other  buildings,  and  in  case  it  desires  to  move 
their  entire  plant  to  this  location,  it  has  abundant  ground 
for  present  needs  and  sufficient  space  for  indefinite  expan- 
sion. 

Even  if  the  question  of  expansion  cost  were  not  consid- 
ered, the  tax  rate,  rental  charges,  and  other  considerations 
are  matters  of  such  considerable  importance  in  a  congested 
community  that  the  profits  of  any  concern  may  be  seriously 
affected  in  a  central  location. 

The  position  of  a  plant  within  the  range  of  industrial 
centers  has  a  profound  influence  in  determining  the  success 
or  failure  of  the  establishment. 

From  the  physical  side  the  success  of  a  plant  is  dependent 
on  two  main  features :  (1)  its  location;  (2)  its  layout  and 
equipment. 

The  location  of  a  jplant  should  be  fixed  in  such  a  manner 
that  the  people  interested  in  its  success  can  sell  the  goods 
most  profitably,  buy  supplies  to  best  advantage,  and  manu- 
facture with  the  least  expense.  To  do  all  this,  the  most 
favorable  location  will  be  one  that  will  include  the  greatest 
possible  number  of  the  following  advantages ; 

I.   Selling. 

Nearness  to  a  large  consuming  market,  or  at  least  a  situ- 
ation such  that  it  can  have  a  cheap  and  adequate  outlet  for 
the  output. 

^v    11.  Buying. 

Closeness  to  supplies,  or  a  situation  such  that  supplies  can 


26    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

1 

be  secured  at  a  minimum  expenditure  for  transportation  and 

at  the  same  time  be  obtained  whenever  desired. 

III.  Manufacturing. 

1.  Proximity  to  a  large  adaptive  labor  population. 

2.  Ready  accessibility  to  repair  shops. 

3.  Nearness  to  good  banking  and  credit  facilities. 

4.  Ability  to  build  so  as  to  suit  special  needs  of  industry. 

5.  Ability  to  expand  plant  cheaply. 

6.  Low  rent  and  tax  rates. 

7.  Freedom  from  restrictive  ordinances  or  onerous  legal 
or  other  requirements. 

8.  Adequate  fire-fighting  facilities  and  low  insurance 
rates. 

**  I.  Selling,  and  II.  Buying.  Nearness  or  Accessibility 
to  MarTcet  and  Supplies. — To  be  successful  a  concern  must 
have  its  plant  accessible  to  market  and  raw  materials.  The 
location  depends  largely  upon  the  nature  of  the  goods  manu- 
factured, and  to  some  extent  upon  the  size  of  the  establish- 
ment. A  small  firm  should  place  its  plant  in  such  a  position 
that  it  can  be  easily  accessible  to  both  market  and  supplies 
without  the  necessity  of  depending  upon  any  single  railroad 
service.  Such  a  plant  cannot  command  sufficient  traffic  to 
make  it  worth  while  for  a  road  to  give  it  special  service, 
hence  if  it  is  in  an  isolated  community,  it  must  accept  a 
poor  or  indifferent  service  with  consequent  loss  of  business. 
If,  however,  the  small  plant  locates  in  a  community  where 
there  are  many  like  itself,  it  will  be  in  a  position  to  secure 
better  service  because  the  roads  will  be  able  to  handle  the 
traffic  of  many  concerns  from  a  central  point,  and  they  will 
arrange  their  train  schedules  to  accommodate  the  combined 
needs  of  a  large  number  of  manufacturers. 

The  map  (Fig.  3)  shows  a  small  portion  of  the  city 
of  Philadelphia,  with  the  location  of  the  dye  houses  which 
dye  carpet  yams.    In  addition  are  placed  the  carpet-weaving 


THEORY  OF  PLANT  LOCATION 


27 


plants  which  are  dependent  upon  the  dye  houses  for  their 
raw  materials.  The  largest  of  the  works  in  the  entire  district 
would  be  unable  to  give  sufficient  traffic  to  either  road  to 


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Fig.  3.— Map  of  a  Portion  of  the  City  of  Philadelphia. 

make  rate  or  service  competition  worth  while,  yet  all  the 
plants  combined  do  make  considerable  traffic  for  both  roads, 
and  as  a  result  the  transportation  service  is  good. 

Were  the  dye  houses  iu  a  differep.t  location,  they  would 


28    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

not  have  a  market  so  accessible,  while  if  the  carpet  mills 
were  differently  situated,  they  would  not  only  have  to  pay 
freight  charges  for  the  yarn  to  the  dye  houses,  but  likewise 
from  the  dye  plants  to  their  mills.  With  both  located  in 
such  proximity  there  is  one  freight  charge  for  the  raw  ma- 
terial to  the  dye  houses,  a  drayage  expense  from  the  dye 
works  to  the  carpet  mill,  and  then  a  final  charge  for  the  fin- 
ished product  to  the  consuming  market. 

If  a  plant  grows  so  that  its  supplies  and  products  demand 
large  facilities  for  handling,  and  its  consuming  public  is 
national  or  world-wide,  then  the  question  of  market  is  one  of 
accessibility  and  not  one  of  proximity. 

To  be  accessible,  a  plant  should  be  so  located  that  it  has 
cheap  inlets  and  outlets  for  its  goods.  The  cheapest  possible 
kind  of  an  outlet  a  plant  may  have  is  one  that  will  enable  it 
to  have  a  choice  of  a  number  of  means  of  transportation.  If 
a  plant  can  be  so  situated  that  it  can  have  competition  be- 
tween waterways  and  railroads,  or  between  railroads,  it  is 
advantageously  placed.  At  the  present  time  roads  do  not 
give  rebates,  nor  do  they  compete  for  freight  by  cutting  prices 
below  the  published  schedules,  as  they  once  did;  but  never- 
theless, if  a  plant  is  placed  so  that  it  can  secure  competition 
from  several  lines,  it  will  have  concessions  granted  to  it  in 
the  way  of  special  commodity  rates,  of  car  supplies  when 
needed,  and  will  have  its  freight  more  promptly  handled 
than  if  it  is  dependent  entirely  upon  one  road.  This  is  true 
for  two  reasons.  One  is  that  it  can  have  a  choice  of  alter- 
native routes  for  shipment,  so  that  in  case  one  is  filled  with 
orders,  the  firm  will  be  very  apt  to  secure  accommodations 
on  the  other.  Another  reason  is  that  if  a  road  realizes  that 
a  freight  consignment  can  be  shipped  over  a  rival's  lines,  it 
will  be  more  likely  to  make  efforts  to  take  care  of  the  freight 
in  order  to  prevent  the  other  transportation  company  from 
securing  it.  Figure  4  illustrates  well  the  advantage  that 
accrues  to  a  firm  if  it  ia  placed  iu  a  location  whereby  it  haa 


THEORY  OP  PLANT  LOCATION 


29 


a  choice  of  water  and  land  shipment  and  competing  lines  of 
road.  The  Union  Railroad  shown  on  the  map  enables  the 
Carnegie  plants  to  ship  their  goods  over  any  one  of  the 
four  roads  touching  Pittsburg,  namely,  the  Pennsylvania 
lines,  the  Baltimore  and  Ohio,  Pittsburg  and  Lake  Erie, 
and  Bessemer  and   Lake   Erie.     In   addition   to   that  the 


umo»    »».    i:*mrr£»si>  - BALTiMOnc   A  Ohio     n./K. 

•»  BtSStntH     *    lUMtS  KJttm      LO'tltUMA-  mr_    unitn    tt.n      IB 


Fig.  4. 


Monongahela  River  makes  it  possible  to  receive  goods  with- 
out using  the  railroad,  and  puts  the  plant  at  an  advantage 
as  compared  with  other  plants  which  depend  entirely  upon 
one  line  for  their  receipts  and  shipments. 

The  United  States  Steel  Corporation  has  always  appre- 
ciated the  benefits  that  can  be  reaped  from  adequate  trans- 
portation facilities.  Their  new  plant  at  Gary,  Indiana,  has 
a  frontage  of  ten  miles  on  Lake  Michigan,  and  is  located  on 
or  immediately  adjacent  to  five  trunk  lines  of  railways,  a 
significant  indication  of  the  far-sighted  sagacity  of  the  mov- 
ing spirits  in  that  great  organization. 

III.  Manufacturing. — L  Proximity  to  Large  Adaptive 
Labor  Population. — Every  establishment  of  whatever  kind,  to 


80    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

have  the  elements  of  success,  must  have  a  supply  of  trained 
laborers  at  the  call  of  the  management  for  the  purpose  of 
running  the  machinery  and  handling  the  raw  materials 
through  their  various  stages. 

It  is  not  only  necessary  for  a  factory  to  be  located  in  the 
midst  of  a  large  population,  but  it  is  likewise  essential  that 
the  population  be  one  that  can  be  depended  upon  to  work 
efficiently  and  regularly.  The  two  qualities,  efficiency  and 
regularity,  are  not  always  to  be  found  in  mere  size  of  popula- 
tion. The  most  serious  objections  to  the  negro  in  the  South 
is  his  unreliability  as  a  worker  in  a  plant.  The  writer  knows 
of  a  number  of  iron  plants  located  in  the  midst  of  a  very 
considerable  negro  population,  where  the  labor  problem  was 
one  of  grave  concern.  In  two  ways  the  negro  cannot  be 
depended  upon.  He  will  invariably  take  several  days  for  a 
recess  after  each  pay  day,  thus  crippling  the  plant  by  his 
absence,  and  he  cannot  be  made  to  attend  to  business  while 
on  duty.  If  he  works  on  the  night  turn  he  is  likely  to  go  to 
sleep  at  some  critical  time  when  alertness  is  necessary  to 
presence  life  and  property.  It  is  only  by  the  most  vigilant 
oversight  that  the  negro  can  be  kept  from  getting  into  trouble 
when  he  consents  to  be  present  at  a  plant.  In  some  sections 
it  has  been  found  advisable  to  import  foreign  laborers  to  the 
Southern  mines  and  mills  rather  than  to  attempt  to  work 
with  the  local  supply  of  labor. 

The  negroes  are  not  alone  in  their  unreliability  as  work- 
ers. In  the  mill  districts  of  the  Carolinas,  one  of  the  great- 
est difficulties  with  which  the  mill  owner  must  contend,  is 
absenteeism  of  the  employees. 

"  There  are  probably  enough  workers  in  the  various  mill  com- 
munities to  man  all  of  the  machinery,  but  the  great  difficulty  to- 
day with  the  cotton  mill  labor  is  that  it  is  not  constant  and  will 
not  work  every  day  in  the  week,  no  matter  what  the  inducements 
may  be.  Every  cotton  mill  in  this  state  recognizes  the  fact  that 
to  have  a  full  complement  of  labor  in  the  mill  each  morning,  when 


THEORY  OF  PLANT  LOCATION  31 

the  whistle  blows  for  the  work  to  begin,  it  is  practically  necessary 
to  carry  a  surplusage  of  from  20  to  25  per  cent  of  'spare  help.' 

"In  a  cotton  mill  in  upper  Carolina  that  has  forty-seven  weavers, 
who  ought  to  make  564  days  in  a  pay  period,  the  president,  to 
induce  the  maximum  attendance  of  the  weavers  at  their  work, 
offered  a  premium  for  all  who  would  report  every  day  in  the  two 
weeks.  In  June  there  were  70o\  days  lost  out  of  the  564  that 
should  have  been  worked.  In  August,  with  the  same  premium 
system  in  force,  161i  days  were  lost  by  the  same  help.  This  calcu- 
lation does  not  account  for  the  spare  help  that  had  to  be  used  to 
fill  in  for  the  loss  of  time  of  the  regular  help."  ^ 

The  great  source  of  expense  in  a  factory  is  its  labor  bill. 
If  the  plant  is  well  supplied  with  orders,  the  wages  paid  to 
the  workers  are  a  profitable  investment.  If,  however,  there 
is  a  scarcity  of  orders,  the  first  thing  a  plant  should  be  able 
to  do  is  to  cut  down  its  most  burdensome  items  of  expense. 
The  only  time  the  laborer  can  be  a  profitable  investment  is 
when  he  is  producing  goods,  so  that  it  is  absolutely  essential 
for  the  prosperity  of  the  plant,  especially  if  it  is  an  industry 
where  there  are  fluctuations  in  orders  and  output,  that  the 
plant  be  so  established  that  when  bad  times  come,  it  can  cut 
down  its  labor  force  to  suit  the  limited  requirements  of  such 
intervals,  and  yet  be  so  placed  that  when  good  times  return 
it  can  reemploy  trained  laborers. 

Mere  numbers  of  people  do  not  necessarily  make  a  suit- 
able labor  environment,  and  what  may  be  a  good  labor  situa- 
tion for  one  industry  may  be  unfitted  for  another.  Certain 
classes  of  production  can  employ  only  men,  while  there  are 
others  wherein  women  and  children  may  be  profitably  en- 
gaged. 

The  Anthracite  Coal  region  offers  employment  to  thou- 
sands of  men,  but  women  cannot  find  work  around  mines. 
As  a  result,  we  find  in  mining  sections  a  considerable  popu- 
lation of  available  female  labor.     The  textile  industries  were 

1  "Cotton  Mills  of  South  Carolina,"  by  August  Kohn,  pp.  61-6^ 
4 


82    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

not  long  in  recognizing  the  opportunity,  and,  as  a  result,  we 
find  located  in  the  Schuylkill,  Lehigh,  and  Susquehanna 
Valleys  in  Pennsylvania  a  number  of  silk  mills,  stocking 
factories,  and  other  fabric  industries  which  make  use  of  this 
otherwise  unemployed  population. 

The  real  question  which  the  manufacturer  should  consider 
is  not  "are  there  many  people  in  a  given  community?"  but 
"will  that  community  have  available  a  sufficient  amount  of 
labor  to  suit  my  peculiar  needs?" 

2.  Ready  Accessibility  to  Repair  Shops. — If  orders  are 
plentiful,  and  a  break  occurs  at  any  point  in  the  system,  a 
firm  loses  in  shortened  output  and  prestige,  if  not  by  actually 
forfeiting  posted  guarantees.  So  important  is  the  question 
of  adequate  repair  facilities  in  the  iron  and  steel  business 
that  the  large  plants  have  entire  sets  of  engines  held  in  re- 
serve to  be  ready  for  any  unexpected  breakdowns.  A  small 
plant  cannot  afford  to  have  reserve  engines  or  duplicate  ap- 
paratus to  be  ready  for  eventualities;  and,  if  it  is  so  located 
that  the  repair  shop  or  the  supplies  for  the  needed  parts  are 
inconveniently  distant,  it  is  liable  to  sustain  severe  losses 
through  a  mishap.  Hence  for  a  small  plant,  proximity  to 
repair  facilities  is  a  highly  desirable  asset.  If  a  plant  is 
large,  it  need  not  consider  the  question  of  placing  itself  in 
the  vicinity  of  repair  houses,  because  it  can  better  afford  to 
have  its  own  repair  shops. 

Large  steel  plants,  textile  establishments,  and  other  con- 
cerns invariably  have  their  o^ti  repair  equipment,  and  are 
constantly  improving  the  mechanical  end  of  their  plants.  In 
fact,  if  they  are  well  organized  and  efficiently  handled,  the 
repair  shops  may  do  much  more  than  merely  act  as  repairing 
agents  for  the  concern,  and  some  plants  have  utilized  their 
machine  shops  for  the  introduction  of  improvements  through 
the  entire  establishment.  The  improvements,  small  as  they 
are  in  individual  items,  amount  in  the  aggregate  to  large 
savings  for  the  firm,  and  the  added  expense  that  the  repair 


THEORY   OF   PLANT   LOCATION  33 

department  requires  for  its  upkeep  is  really  a  money-making 
investment  for  the  firm,  because  it  keeps  the  machines  con- 
tinuously running  at  a  high  state  of  efficiency,  giving  a 
maximum  output  for  a  minimum  expenditure  of  power  and 
labor. 

3.  Nearness  to  Good  Banking  and  Credit  Facilities. — 
One  of  the  most  important  assets  a  company  may  possess  ia 
good  credit,  without  which  it  can  hardly  ever  hope  to  advance 
during  good  times  or  even  perpetuate  its  existence  during 
stringent  periods.  A  small  concern  is  usually  dependent 
upon  nearby  banks  for  its  credit,  and  if  it  is  inconveniently 
located,  or  is  distant  from  good  financial  backing,  it  is  put- 
ting itself  into  the  business  world  with  a  severe  handicap. 
If  it  is  well  known  and  near  a  number  of  good  credit  sources, 
it  stands  a  much  better  chance  of  securing  backing  on  a  rea- 
sonable basis  than  if  it  is  dependent  upon  one  institution 
that  has  little  or  no  competition. 

A  large  concern  is  differently  situated  in  the  respect  that 
its  mere  size  gives  it  prestige  in  a  wider  financial  circle,  and 
enables  it  to  get  credit  facilities  in  many  ways  and  from 
many  sources  not  open  to  small  concerns.  It  can,  therefore, 
practically  ignore  in  its  location  local  credit  possibilities. 
In  fact,  a  concern  may  get  to  be  so  large  and  important  that 
it  can  dominate  banks  and  financial  institutions  and  largely 
create  for  itself  a  credit  fortress ;  but  those  organizations  are 
few.  Generally  speaking,  the  smaller  the  plant,  and  the 
more  local  its  market,  the  more  unavoidable  is  its  dependence 
upon  local  banks,  and  the  more  discriminating  the  care 
which  must  be  exercised  in  its  choice  of  a  site. 

4,  5.  Ability  to  Build  So  As  to  Suit  Special  Needs  of 
the  Industry,  and  Ability  to  Expand  Plant  Cheaply. — An 
organization,  to  realize  its  full  measure  of  success,  should 
build  the  plant  in  such  a  manner  that  the  manufacturing 
process  may  be  carried  on  with  a  minimum  expenditure  of 
time  and  material.    The  ideal  plant  is  one  that  is  adapted  to 


84    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

its  special  type  of  manufacturing.  The  ideal  location  is  one 
that  will  permit  such  a  plant  to  be  built,  and  at  the  same 
time  give  it  sufficient  clearance  space  on  all  sides  to  permit 
additions  to  be  made  without  necessitating  a  rearrangement 
of  the  machinery  and  equipment  of  the  original  plant  in  case 
growing  business  demands  an  increase  in  facilities. 

\\Tien  a  profitable  business  is  increasing,  a  manufacturer 
can  be  in  no  worse  position  than  to  be  unable  to  fill  orders. 
If  he  does  not  fill  them,  rivals  will  soon  appear  in  the  field 
who  will  not  only  take  his  surplus  business,  but  will  become 
keen  competitors  for  trade  hitherto  his  own.  Hence,  if  a 
plant  is  to  be  extended,  it  should  be  possible  to  make  the 
enlargement  in  such  a  manner  that  at  no  time  will  there  be 
any  diminution  in  the  output  of  the  old  plant  until  the  new 
one  can  be  utilized. 

It  has  been  found  that  a  single  plant  may  be  enlarged  to 
a  point  where  further  extension  does  not  tend  toward  econ- 
omy, and  where  it  is  cheaper  to  build  a  new  factory  or  plant 
than  it  is  to  keep  on  increasing  the  size  of  the  old  one. 
When  a  plant  reaches  those  dimensions,  expansion  room 
does  not  need  to  be  provided,  but  until  those  proportions 
are  attained,  an  organization  should  endeavor  to  make  pro- 
visions for  future  growth.  To  provide  for  that  future  possi- 
bility, it  is  necessary,  for  the  prosperity  of  the  concern,  that 
it  shall  not  burden  itself  at  the  beginning  to  provide  for 
future  prospects.  It  should  not  tie  up  much  capital  in  a  big 
plot  of  ground  or  large  building  in  anticipation  of  future 
needs,  because  by  so  doing  it  is  putting  an  unnecessary 
burden  in  fixed  charges  upon  a  present  business,  that  should 
have  no  heavy  expense  at  all.  With  such  a  load,  the  man- 
agement cannot  experiment  to  improve  the  output,  to  cut 
costs  in  manufacturing,  nor  can  it  adopt  a  liberal  policy  to 
extend  its  market  for  the  goods. 

One  of  the  surest  plans  a  concern  can  follow,  to  prevent  it 
from  ever  requiring   expansion  room,   is  to  incur  a  heavy 


THEORY  OF  PLANT  LOCATION  85 

expend  in  securing  a  location  that  will  permit  future 
growth.  In  selecting  a  site,  present  demands  should  be 
amply  satisfied.  They  should  never  be  subordinated  to 
future  hopes. 

6,  7.  Loiu  Rent  and  Taxes,  and  Freedom  from  Restric- 
tive Ordinances  or  Onerous  Legal  or  Other  Requirements. — 
A  selling  organization  must  put  itself  in  some  conspicuous, 
easily  accessible  center;  hence  it  would  be  false  economy  to 
accept  a  cheap  location  if  it  were  away  from  a  much  fre- 
quented situation.  Frequented  situations  are  almost  invari- 
ably expensive.  Taxes  and  rents  are  bound  to  be  high,  but 
the  increased  business  that  can  be  done  in  such  a  position 
will  more  than  compensate  for  the  heavy  burden  involved  in 
the  location. 

A  manufacturing  establishment  has  quite  different  condi- 
tions. Quality  and  quantity  of  output  are  the  main  factors 
which  contribute  to  the  success  of  a  plant. 

The  managers  cannot  afford  to  stay  out  of  the  market,  but 
it  is  not  necessary  to  put  the  plant  in  an  expensive  location 
to  have  the  goods  accessible  to  the  consumer.  The  promoters 
should  endeavor  to  locate  in  the  best  possible  place  that  will 
allow  of  cheap  manufacturing,  and  will  give  easy  accessi- 
bility to  the  trade. 

The  selling  department,  as  a  matter  of  fact,  need  not  be 
in  the  plant  at  all,  and  in  a  great  number  of  the  largest  con- 
cerns it  is  located  in  the  commercial  centers,  far  removed 
from  the  buildings  which  turn  out  the  goods.  In  adopting 
this  scheme,  one  can  combine  the  advantages  of  a  good  sell- 
ing location  with  economy  in  fixed  charges  for  the  producing 
part  of  the  plant. 

Not  only  should  care  be  exercised  in  locating  away  from 
high  taxes  and  rents,  but  investigation  should  be  made  of 
the  question  of  restrictive  ordinances  that  may  affect  the 
plant.  Manufacturing  establishments  are  frequently  annoyed 
and  even  seriously  hampered  by  local  ordinances  which  pre- 


86    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

vent  them  from  carrying  on  their  work  in  the  manner  most 
satisfactory  to  themselves. 

The  people  have  a  perfect  right  to  pass  laws  and  regula- 
tions which  will  make  life  pleasant  in  any  given  community. 
The  property  and  welfare  of  a  large  number  of  people  should 
not  be  sacrificed  for  any  one  group  of  citizens;  yet,  on  the 
other  hand,  the  manufacturer  cannot  afford  to  sustain  restric- 
tion in  output  or  unnecessary  expense  for  some  objection, 
either  fancied  or  real,  of  the  surrounding  neighborhood.  In 
selecting  a  site  for  a  new  plant,  therefore,  care  should  be 
exercised  that  the  new  factory  shall  not  be  the  cause  of  hos- 
tile legislation. 

Some  years  ago  a  certain  company  entered  into  a  contract 
with  the  municipal  authorities  of  a  large  city  to  dispose  of 
the  garbage  by  an  incinerating  process.  The  contract  was 
one  satisfactory  both  to  the  municipality  and  to  the  officials 
of  the  concern.  Fortified  by  these  considerations,  the  cor- 
poration purchased  an  abandoned  white  lead  works  and 
erected  expensive  apparatus  for  the  purpose  of  reducing  their 
garbage.  No  objection  was  made  to  the  new  installation, 
but  it  had  not  been  in  operation  one  week  before  there  was 
a  veritable  hurricane  of  vituperation  heaped  upon  everyone 
connected  with  the  plant  and  upon  those  who  made  the  con- 
tract. Injunctions  were  issued,  within  a  month  the  company 
became  involved  in  scores  of  law-suits,  and  finally  had  to 
vacate  the  premises. 

8.  Adequate  Fire- Fighting  Facilities  and  Loio  Insurance 
Rates. — A  manufacturer  in  selecting  his  site  should  take 
into  consideration  the  fact  that  a  fire  can  injure  his  building 
in  one  of  two  ways.  It  may  either  originate  within  the  walls 
of  his  own  structure  or  invade  it  from  the  outside.  The 
internal  and  private  fire-fighting  facilities  will  be  treated 
later.  Here  we  shall  note  the  fire  risk  with  respect  to  loca- 
tion. 

Many  towns  in  this  country  have  poor  fire-fighting  facili- 


THEORY  OF  PLANT  LOCATION  87 

ties.  As  a  consequence  manufacturers  in  those  districts  pay- 
insurance  premiums  disproportionate  to  the  assessments,  the 
structure  of  their  buildings,  and  the  nature  of  their  business 
would  otherwise  demand.  Insurance  companies  are  very 
critical  of  the  fire-fighting  facilities  of  a  community.  In 
almost  every  towm  there  is  a  fire-danger  zone  assessed  at  a 
higher  rate  than  is  the  surrounding  districts. 

In  taking  into  consideration  the  public  fire-fighting  facil- 
ities, the  manufacturer  does  well  to  examine  carefully  the 
following  features : 

1.  Water  supply:  By  whom  it  is  owned,  its  organization. 
Has  the  place  high  pressure  mains?  Is  there  ever  danger  of 
water  famines,  and  all  other  points  which  may  in  any  way 
affect  its  efficiency  in  fighting  a  large  or  small  conflagration. 

2.  Fire  department:  Its  organization,  including  the  per- 
sonnel, from  the  chiefs  do^m  to  the  least  important  man  of 
the  department.  Is  it  a  paid  or  volunteer  company?  The 
extent  and  nature  of  the  equipment  of  the  fire  stations,  the 
number  and  location  of  the  stations.  Have  all  the  fire  plugs 
standard  couplings,  and  all  other  points  which  may  affect 
the  utility  of  the  protection  at  a  critical  time. 

3.  Fire-alarm  system:  Here  the  investigation  turns  on 
the  number  of  alarms  in  the  community,  their  location, 
efiiciency,  design,  and  other  similar  considerations. 

4.  Fire  department  auxiliaries:  Under  this  head  are  con- 
sidered the  efiiciency  of  the  police  department,  arrangement 
of  the  streets,  the  proximity  to  other  communities  which  can 
give  assistance,  the  possible  value  of  such  aid  in  time  of 
need;  is  the  district  menaced  with  overhead  wires?  Are 
the  building  laws  efficient  and  well  executed? 

Some  cities  have  gone  to  the  trouble  and  expense  of  in- 
stalling within  their  fire-danger  zones  special  water  mains 
with  equipment  to  keep  the  water  pressure  at  a  high  point 
throughout  the  system.     These  mains  are  for  fire  use  only. 

hx  the  year  1900,  the  insurance  companies  raised  the  fixQ 


38    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

rates  in  Philadelphia  25  cents  per  $100  on  all  risks  located 
in  the  congested  district.  In  1904,  a  high  pressure  system, 
equivalent  to  twenty  steam  fire  engines,  was  finished  and 
turned  over  to  the  city.  The  stationary  pumps  at  the  water  * 
front  can  deliver  to  the  hydrants  a  water  pressure  of  300 
pounds  to  the  square  inch.  The  plant  is  run  by  gas,  and 
the  entire  system  can  be  put  into  full  operation  in  seven 
minutes.  Only  forty- five  seconds  are  necessary  for  the  pumps 
to  develop  800  pounds  pressure.  The  plant  is  capable  of 
supplying  fifteen  IJ-inch  streams  of  water,  which  may  be 
concentrated  on  any  block  within  the  protected  district. 
When  the  plant  was  tested  and  accepted,  the  Fire  Under- 
writers' Association  reduced  the  fire  rates  to  the  old  basis.  ^ 
This  is  one  of  a  number  of  examples  which  may  be  cited 
showing  the  importance  of  being  in  a  good  fire-fighting 
community. 

If  a  person  is  manufacturing  a  class  of  goods  not  espe- 
cially inflammable,  it  is  inadvisable  for  him  to  erect  his 
works  near  another  plant  whose  commodities  are  noted  for 
their  inflammability.  Proximity  to  such  a  building  forces 
the  former  manufacturer  to  take  especial  precautions  in  erect- 
ing his  plant.  It  necessitates  the  use  of  fire  walls  and  other 
expensive  devices,  besides  compelling  him  always  to  carry  a 
higher  insurance  rate,  while  notwithstanding  all  these  pre- 
cautions his  position  is  still  precarious. 

'^Insurance  Engineering,  Vol.  XII,  "High  Pressure  Fire  SyS' 
terns,"  by  F.  L.  Hand,  pp.  525-541. 


CHAPTER  IV 

THE   IDEAL   SITUATION 

The  type  of  manufacturing  that  is  carried  on  by  an  or- 
ganization determines  to  a  very  considerable  degree  the  most 
favorable  site  for  its  plant.  There  may  be  three  kinds  of 
situations  for  plants,  viz. :  (1)  country,  (2)  city,  (3)  sub- 
urbs, and  each  one  of  the  three  offers  peculiar  advantages. 

1.  Country. — The  economic  advantages  offered  by  a 
coimtry  location  are  few  in  number,  but  for  some  industries 
they  are  exceedingly  imjoortant.  The  country  offers,  as  in- 
ducements to  the  manufacturer,  cheap  land,  low  rents  and 
taxes,  and  freedom  from  restrictive  ordinances.  These  fav- 
orable considerations  enable  interested  people  to  purchase 
sufficient  territory  to  permit  of  the  adaptation  of  a  plant  to 
the  special  requirements  of  the  process,  and  at  the  same  time 
allow  them  to  provide  for  space  enough  to  grow  without 
making  it  necessary  for  them  to  tie  up  too  much  capital  in 
unproductive  ground. 

The  country,  however,  offers  a  number  of  objections  as  a 
location  for  industries.  In  the  first  place,  it  is  hard  to  draw 
to  sparsely  settled  sections  a  sufficient  body  of  skilled  labor- 
ers to  make  it  possible  to  keep  the  plant  continuously  em- 
ployed. A  firm  of  stove  founders  once  conceived  the  idea  of 
erecting  a  plant  in  a  small  town  at  a  considerable  distance 
from  any  large  city.  They  were  exempted  from  taxes  for  a 
term  of  years  and  had  many  other  favors  granted  to  them, 
yet  in  spite  of  all  the  assistance  they  eventually  had  to 
abandon  the  plant  on  account  of  its  inability  to  hold  skilled 
labor  in  the  district.     If  the  industry  is  one  where  akiUed 

39 


40    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

labor  is  not  an  important  factor,  it  is  sometimes  possible  to 
recruit  workers  from  the  surrounding  districts.  The  cotton 
manufacturers  in  the  South  soon  exhausted  the  labor  in  the 
small  towns  wherein  they  were  located,  and  recruited  their 
ranks  from  the  back  country  by  means  of  advertising  through- 
out the  district  for  workers.  August  Kohn  in  his  book  gives 
a  number  of  illustrations  of  the  advertising  matter  that  was 
used,  and  speaks  at  length  of  the  troubles  the  Southern  man- 
ufacturer had  in  getting  labor.  ^ 

The  country  offers  very  little  inducement  to  working  peo- 
ple to  settle  within  the  vicinity  of  a  plant  so  situated,  unless 
the  plant  is  of  considerable  size. 

Another  objection  that  may  be  offered  to  a  country  loca- 
tion is  that  it  is  not  near  supply  houses  or  market,  and  re- 
pair shops  are  apt  to  be  unhandy.  No  one  can  afford  to  let 
a  plant  stand  idle  at  any  time,  least  of  all  when  supplied  with 
orders ;  so,  if  an  accident  happens  to  a  running  machine,  the 
renewal  parts  should  be  available  to  make  immediate  repairs. 
If  a  plant  is  in  the  country,  it  is  likely  to  be  away  from 
supply  houses,  and  must,  therefore,  carry  in  stock  a  great 
many  more  duplicate  parts  of  equipment  than  if  it  were  in  a 
large  city.  To  carry  duplicate  parts,  one  must  tie  up  money 
in  unproductive  material.  The  pieces  may  be  used  sooner 
or  later,  or  it  may  happen  that  new  machines  will  come  in 
which  cannot  use  those  parts,  and  the  material  has  nothing 
more  than  a  scrap  value. 

A  large  plant  can  ignore  the  necessity  of  keeping  in  con- 
tact with  supply  houses  and  repair  shops  and  similar  advan- 
tages, because  its  mere  size  will  make  it  possible  for  it  to 
keep  a  repair  department  and  likewise  make  it  profitable  for 
it  to  carry  sufficient  supplies  to  be  independent  of  any  out- 
flide  concern.  The  plants  of  large  companies,  like  the  United 
States  Steel  Corporation,  always  have  their  own  foundries 

1  "ThQ  Qotton  Mills  of  South  Carolina,"  Artiqlq  IV, 


THE  IDEAL  SITUATION  41 

and  repair  shops  as  a  part  of  the  plant.  The  Gary  plant  at 
Gary,  Indiana,  has,  in  connection  with  its  steel  plant, 
foundries,  boiler  shops,  machine  shops,  carpenter  shops, 
and  pattern  shops,  so  that  it  is  practically  independent  of 
all  outside  aid. 

So  far  as  the  market  is  concerned,  to  the  manufacturer  of 
steel  rails,  structural  iron,  or  any  large  and  heavy  material 
whose  products  go  over  the  entire  country,  nearness  to  a  city 
is  of  minor  consideration,  because  their  markets  are  widely 
scattered.  With  such  production,  transportation  facilities 
and  switching  privileges  are  the  essential  needs  rather  than 
close  proximity  to  a  city. 

2.  City. — In  a  city,  the  cost  of  living  is  greater  than  in 
the  country,  but  the  city  offers  to  working  people  a  larger 
number  of  economic  and  social  advantages  than  does  the 
country.  Wages,  as  a  rule,  are  higher,  and  there  are  more 
opportunities  for  advancement  open  to  the  ambitious  person, 
because  city  evening  schools  and  other  educational  advantages 
present  means  of  self- improvement  that  are  not  as  a  rule 
offered  to  country  dwellers. 

Commercial  houses  in  large  cities  afford  attractive  em- 
ployment to  women  and  girls  in  the  way  of  stenographic 
positions,  clerical  work,  and  bookkeeping,  while  the  large 
department  stores  employ  hundreds  of  girls  as  sales  people. 
When  a  working  family  is  located  in  a  large  city,  every  one 
in  the  family  has  a  greater  opportunity  of  securing  employ- 
ment. The  family  is  not  so  dependent  upon  the  earnings 
of  the  older  male  members  as  it  is  when  located  in  the 
country. 

Many  industries  peculiarly  adapted  to  the  employment  of 
women  and  girls  find  that  a  city  location  is  by  far  the  more 
desirable.  Textiles,  as  a  rule,  flourish  better  in  a  large  com- 
munity, the  reasons  for  this  being  that  women  and  children 
are  more  readily  procured  for  employment.  The  northeastern 
part  of  Philadelphia  is  a  great  textile  center,  very  largely 


42    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

because  of  the  location  there  of  large  numbers  of  shipyards, 
machine  shops,  foundries,  steel  works,  saw  works,  leather 
curing,  and  other  plants  which  employ  men  almost  exclu- 
sively. 

Besides  the  fact  that  working  people  can  get  work  more 
readily  in  the  city,  there  is  another  consideration.  The  city 
offers  more  entertainment  than  does  the  country.  The  amuse- 
ment and  social  side  of  life  is  usually  more  pleasant  in 
the  city  than  in  the  country.  There  is  more  gaiety  in  the 
town. 

Aside  from  the  question  of  labor,  the  city  location  is 
better  for  being  near  to  a  market.  This  is  an  exceedingly 
important  consideration  for  industries  directly  dependent  to 
a  greater  or  less  extent  upon  other  plants,  e.g.,  box  factories, 
yam  mills,  etc.  Industries  which  are  varied  by  styles  or 
tastes  of  people  do  better  if  located  in  town.  Small  manu- 
facturers can  do  better  in  a  city  because  their  selling  expenses 
are  lower.  They  can  learn  of  selling  markets  more  readily, 
and  can  make  quicker  deliveries  because  of  better  express 
service. 

A  third  manifest  advantage  of  a  city  location,  especially 
for  a  small  plant,  is,  as  we  have  already  seen,  that  it  will  be 
near  to  repair  shops  and  supply  houses. 

In  addition  to  being  near  supply  houses  and  repair  shops, 
a  city  environment  usually  contributes  the  advantage  of  local 
banking  and  credit-obtaining  facilities.  These  latter  items 
are  of  great  importance  to  small  concerns.  A  large  plant,  to 
carry  on  any  of  its  important  schemes,  must  be  able  to  secure 
financial  backing  from  the  great  money  centers ;  hence,  so  far 
as  credit  is  affected,  location  is  not  a  matter  of  material  con- 
cern. Moreover,  a  large  organization  can,  either  directly  or 
indirectly,  establish  local  banks  and  thus  create  for  itself  a 
credit  source  of  considerable  importance.  To  the  smaller 
plant  neither  access  to  the  large  money  centers  nor  ability  to 
establish  and  dominate  banks  is  possible.     It  must  depen,d 


THE  IDEAL  SITUATION  43 

upon  friendly  outsiders  who  are  in  a  position  to  know  its 
managers  and  the  success  of  the  enterprise.  If  a  small  or- 
ganization is  near  only  one  bank,  it  may  have  to  consent  to 
hard  borrowing  terms.  If  it  is  near  many,  it  will  have  a 
much  better  chance  to  get  reasonable  concessions  which  will 
helj)  it  along  the  road  of  continued  prosperity. 

The  main  disadvantages  of  the  city  are  high  land  cost, 
entailing  large  rents  and  taxes  and  a  liability  of  being  com- 
pelled to  obey  municipal  ordinances  which  may  restrict  the 
output  of  the  concern  or  increase  its  running  expenses. 

To  summarize  the  entire  situation,  if  there  were  no  other 
place  than  a  city  or  the  country  to  establish  a  plants  a  gen- 
eral statement  might  be  made  that  for  a  small  plant  a  city 
location  is  better,  while  for  a  large  concern  a  country  site 
would  be  more  advantageous. 

3.  Suburbs. — The  suburbs  of  large  cities,  however,  offer 
a  third  situation.  The  suburbs  possess  the  advantage  of 
being  able  to  combine  to  a  great  extent  the  advantages  of 
both  the  city  and  the  country.  In  the  suburbs,  land  values 
are  usually  not  so  high  that  they  unduly  burden  the  concern 
to  provide  for  future  growth;  and  restrictive  ordinances  are 
likewise  usually  less  frequent  than  in  the  cities.  Labor  is 
easily  persuaded  to  come  to  the  outskirts  of  large  cities,  be- 
cause, as  a  rule,  rents  are  lower  and  living  is  cheaper,  while 
at  the  same  time  the  trolley-car,  telephone,  and  other  con- 
veniences have  made  it  possible  for  the  suburbanite  to  par- 
take of  the  advantages  of  the  city. 

Suburban  locations  are  likewise  liable  to  be  in  the  region 
of  good  railway  facilities.  Large  cities  are  apt  to  be  the 
meeting-places  of  a  number  of  railways,  and  many  commu- 
nities have  built  belt  lines  connecting  these  various  roads, 
making  it  possible  for  the  suburban  manufacturer  to  have 
the  choice  of  several  lines  by  which  he  can  ship  his  goods. 
Where  belt  lines  are  not  in  existence,  it  is  much  easier  for 
the  suburban  manufacturer  to  obtain  private  sidings  to  coni' 


44    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

peting  railways  than  it  is  in  either  city  or  remote  country 
locations. 

The  suburbs  can  provide  for  the  other  considerations — 
accessibility  to  repair  sho2:)8,  supply  houses,  nearness  to  mar- 
kets, banks,  and  credit  facilities — nearly,  if  not  quite,  as  well 
as  the  city  itself. 

In  addition  to  the  advantages  naturally  coincident  with 
a  location  either  in  country,  city,  or  suburbs,  there  are  fre- 
quently other  inducements  offered  by  various  bodies  to  en- 
courage the  industrial  development  of  the  community.  Rail- 
roads are  very  anxious  to  have  factories  locate  along  their 
lines.  The  two  bodies,  the  local  community,  and  the  rail- 
road company,  work  in  harmony,  although  each  is  working 
for  its  particular  end,  the  former  to  secure  plants,  the  latter 
to  obtain  traffic.  The  railroads  have  organized  industrial 
depart.menta  which  they  call  by  various  names.  The  officials 
in  charge  of  these  departments  keep  on  file  all  available  in- 
formation relating  to  the  natural  and  artificial  advantages  of 
the  towns  and  districts  tapped  by  their  lines. 

The  artificial  advantages  of  a  town  or  district  are  those 
favors  and  concessions  granted  by  the  residents  of  the  place 
to  any  newcomers  who  may  be  induced  to  bring  a  factory  or 
some  other  kind  of  institution  within  its  borders. 

Few  communities  fail  to  see  the  advantages  of  the  pres- 
ence of  manufacturing  plants.  Much  of  the  recent  increase 
in  Southern  prosperity  has  been  due  to  the  location  of  profit- 
able cotton  mills. 

'  'The  addition  of  such  an  industry  as  cotton  manufacturing  could 
not  but  increase  the  value  of  real  estate  in  Spartanburg  County- 
very  greatly  for  several  reasons. 

"1.  The  cotton  mills  have  been  located  in  all  parts  of  the  county. 
There  have  arisen  small  towns  wherever  the  mills  have  been 
erected,  and  the  property,  which  was  formerly  on  the  market  as 
farming  lands,  is  now  sold  on  the  basis  of  city  lots,  which  has  ele- 
vated values  very  much.  The  mills  located  in  the  vicinity  of  the 
larger  towns  have  developed  the  outskirts  of  these  towns ;  so  that 


THE  roEAL  SITUATION  45 

the  property  has  become  very  valuable,  while  before  the  coming 
of  the  mills  the  property  was  not  rated  as  city  property. 

"2.  The  enormous  increase  in  the  annual  income  of  the  county  of 
Spartanburg,  caused  by  the  coming  of  the  mills,  has  caused  a 
general  prosperity,  and  desirable  property  was  soon  purchased  by 
those  participating  in  the  benefits.  With  the  general  prosperity 
came  the  desire  to  own  homes  and  real  estate.  With  ready  pur- 
chasers always  in  sight  there  was  a  constant  demand  for  real 
estate,  and  with  the  demand  came  the  increase  in  value. 

"3.  The  dividends  annually  paid  out  in  Spartanburg  go  to  swell 
the  bank  accounts  of  the  people  in  the  county,  and  this  money  is 
soon  reinvested.  Real  estate  is  considered  an  excellent  investment 
in  Spartanburg,  and  many  of  the  dollars  paid  out  by  the  mills  go  to 
purchase  real  estate.  There  is  always  a  demand  for  good  real 
estate,  and  there  is  a  large  amount  of  property  changing  hands  in 
this  county  each  year."  ^ 

What  is  true  of  South  Carolina  and  the  cotton  mills  is 
likewise  true  of  other  parts  of  the  country,  and,  as  a  result, 
communities  scattered  all  over  this  land  offer  various  induce- 
ments to  factory  managers.  These  inducements  may  be 
classified  under  the  following  heads,  viz. :  (1)  free  land, 
(2)  free  building,  (3)  exemption  from  taxes,  (4)  subscrip- 
tions to  stock,  (5)  cash  bonus,  (6)  miscellaneous  favors. 

(1)  Free  Land. — The  Boards  of  Trade  of  many  towns 
have  committees  appointed  whose  work  is  to  advertise  the 
advantages  of  their  particular  localities.  These  committees 
keep  informed  of  new  projects  proposed  by  various  outside 
concerns,  and  they  endeavor  to  secure  the  interest  of  the  pro- 
moters by  presenting  to  them  the  advantages  of  their  town, 
and  at  the  same  time  these  Board  of  Trade  workers  endeavor 
to  secure  the  active  co-operation  of  the  citizens  by  having 
them  contribute  money  for  the  purpose  of  investing  in  factory 
sites  which  will  be  at  the  disposal  of  the  Board  of  Trade,  to 
give  to  companies  that  are  looking  for  a  factory  location. 
Sometimes  promoters  can  interest  a  group  of  citizens  to  col- 

1  "Cotton  Mills  of  South  Carolina,"  pp.  185,  186,  quoting  Mr.  J. 
T.  Rhett,  Sec'y*  Spartanburg  Chamber  of  Commerce. 


46    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

lect  sufficient  funds  to  purchase  a  site  for  their  enterprise. 
Of  course  the  citizens  who  will  be  interested  in  securing  a 
factory  site  and  are  willing  to  contribute,  will  be  the  ones 
most  likely  to  form  the  membership  of  a  local  Board  of 
Trade;  but  this  is  not  always  necessarily  true.  The  differ- 
ence between  the  Board  of  Trade's  action  and  the  citizens' 
action  is  that  the  one  is  a  systematic  endeavor,  while  the 
other  is  an  occasional  one.  In  some  cases  the  town  itself 
may  appropriate  money  to  secure  factory  sites;  and,  in  some 
other  instances,  a  private  citizen  may  give  a  piece  of  land 
for  the  same  purpose.  It  is  far  more  common,  however,  for 
the  land  to  be  contributed  by  the  Board  of  Trade  or  the  citi- 
zens acting  as  a  body  on  some  special  occasion. 

(2)  Free  Building. — Some  years  back  it  was  not  uncom- 
mon for  the  Boards  of  Trade  and  other  organizations  to  en- 
courage the  location  of  factories  by  providing  buildings. 
This  building  might  be  given  outright  to  the  factory  OTVTiers,- 
but  more  usually  the  arrangements  were  as  follows:  The 
townspeople  were  informed  what  type  of  building  was  de- 
sired, and  they  would  erect  the  structure  according  to  the 
specifications  and  then  lease  the  building  to  the  promoters  of 
the  enterprise  for  a  sum  of  money  which  might  or  might  not 
be  nominal.  It,  at  any  rate,  would  be  comparatively  low. 
At  the  termination  of  the  lease,  the  factory  managers  then 
had  the  option  of  buying  the  building  for  a  fixed  sum  pro- 
vided for  in  the  contract,  and  usually  they  willingly  paid 
this  amount. 

(3)  Exemption  from  Taxes. — Tax  exemption  is  probably 
the  most  common  form  of  concession  given  to  prospective 
manufacturers.  The  release  from  tax  payments  extends  from 
one  year  to  a  decade,  and  in  some  cases  even  longer,  although 
the  latter  is  not  common.  This  tax  exemption  as  a  rule 
means  only  municipal  tax.  It  does  not  relieve  the  concern 
from  the  pajTuent  of  state  or  county  levies. 

(4)  Subscriptions  to  Stock. — Sometimes  the  citizens  in 


THE  IDEAL  SITUATION  47 

a  community  are  not  only  anxious  to  have  various  kinds  of 
factories  locate  within  their  borders,  but  are  willing  and  even 
desire  to  invest  in  a  proposed  scheme  if  the  promoters  will 
locate  in  their  vicinity.  Frequent  instances  are  on  record  in 
which  some  enterprising  individual  has  enlisted  the  support 
of  a  community  and  put  up  a  plant  with  the  money  supplied 
either  wholly  or  in  part  by  the  residents.  The  residents  may 
make  various  kinds  of  agreements  with  the  promoters.  In 
some  cases  the  promoter  becomes  merely  the  managing  em- 
ployee of  the  concern,  being  remunerated  by  regular  salary; 
and  in  case  the  plant  is  a  success,  he  is  given,  at  the  end  of 
a  certain  time,  a  percentage  of  the  capital  stock  by  vote  of 
the  board  of  directors.  At  other  times  the  inhabitants  sub- 
scribe to  the  stock  and  become  stockholders  in  the  firm,  but 
do  not  have  sufficient  control  of  the  enterprise  to  have  more 
than  one  or  two  representatives  on  the  board  of  directors. 

(5),  (6)  Cash  Bonus  and  Miscellaneous  Favors. — In 
some  rare  cases  communities  offer  cash  inducements.  An 
illustration  of  such  a  concession  is  afforded  in  Urbana, 
Illinois.  When  the  Big  Four  Railroad  Company  desiiod  to 
build  its  car  and  repair  shops  for  the  Peoria  division,  the 
to^vns  along  the  line  started  an  active  competition.  Urbana 
secured  the  shops  by  offering  a  bonus  of  $40,000. 

Other  inducements  granted  are  sometimes  free  gas,  or  free 
power  for  a  limited  period  of  time.  One  town  put  a  fire- 
fighting  system  into  a  plant  as  one  of  its  inducements.  The 
citizens  of  another  town  are  now  contemplating  the  building 
of  a  belt  line  to  connect  competing  railroads,  and  are  offer- 
ing factory  sites  at  a  very  moderate  cost  along  the  proposed 
belt  line.  There  are  numbers  of  other  inducements  of  a 
minor  nature,  all  of  which  are  given  to  secure  an  industrial 
population. 

These  artificial  inducements  are  not  peculiar  to  any  sec- 
tion of  the  country,  nor  to  either  country,  suburbs,  or  city, 
although  it  is  more  common  for  the  country  or  small  town 
6 


J8    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

communities  to  make  the  offers  than  for  the  large  centers  of 
population,  ^\^len  a  person  is  contemplating  the  building 
of  a  factory,  it  is  well  indeed  for  him  to  secure  all  the  possi- 
ble concessions  and  inducements  that  a  district  will  yield; 
but  if  the  natural  advantages  are  not  present,  it  is  a  poor 
plan  to  take  advantage  of  some  extraordinary  offer.  The 
artificial  inducement  may  give  the  organization  a  start;  but 
unless  the  natural  factors  are  also  present,  it  can  do  nothing 
more,  and  the  plant  will  then  have  to  struggle  along  under 
a  severe  handicap  and  must  eventually  fail.  The  artificial 
factors  should  be  considered  only  when  they  supplement 
natural  advantages,  and  should  never  be  the  determining 
consideration  in  making  a  factor^^  location. 


CHAPTER  V 

BUSINESS  CONCENTRATION  AND   INTEGRATION 

Within  the  past  decade,  there  has  been  in  the  United 
States  a  remarkable  development  of  industrial  activities. 
The  year  1898  marks  the  opening  of  the  era  of  widespread 
plant  consolidations.  Between  that  time  and  June  80,  1900, 
of  the  185  industrial  consolidations  which  then  controlled 
2,040  active  plants,  no  less  than  112  had  been  consummated 
within  those  thirty  months.^  In  Moody'' s  Manual  for  the 
year  1908  there  are  recorded  about  400  industrial  organiza- 
tions which,  if  we  include  the  bonded  indebtedness,  have  a 
capitalization  exceeding  $5,000,000,000.  The  total  invest- 
ments represented  in  industrials  in  the  United  States  is  no 
less  than  $12,686,000,000.2  When  we  consider  the  enor- 
mous nmnljer  of  plants  and  establishments  these  investments 
must  represent,  and  realize  that  stockholders  are  ever  clamor- 
ing for  dividends,  we  can  appreciate  the  fact  that  successful 
managers  must  be  in  great  demand. 

No  one  can  reasonably  hold  a  person  responsible  for  the 
successful  running  of  an  enterprise  unless  the  organization  is 
in  such  a  condition  that  the  person  in  charge  can  have  a  fair 
chance  to  administer  the  affairs  of  the  firm  profitably. 

The  capitalization  of  prospective  earnings  has  been  one 


^Cf.  Twelfth  United  States  Census,  Manufactures;  Bulletin  No. 
122,  December  30,  1901,  Industrial  Combinations,  pp.  2  and  3.  Also 
of.  Twelfth  Census,  Vol.  VII,  Manufactures,  Part  I,  p.  Ixxvi. 
The  discrepancy  is  probably  due  to  the  discovery  of  some  errors  in 
the  former  volume. 

^Statistical  AbstroQtf  1909,  p.  192. 

49 


50    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

of  the  most  fruitful  causes  of  industrial  shipwrecks.  Enter- 
prising promoters  have  endeavored  to  assure  the  prosperity 
of  their  projects  by  concentrating  into  one  organization  all 
the  larger  rival  interests,  thus  obtaining  a  practical  monopoly. 
In  some  instances  this  scheme  has  turned  out  successfully; 
in  others,  the  subscribers  to  the  projects  have  found  the 
schemes  to  be  merely  expensive  methods  of  purchasing  richly 
engraved  paper. 

A  plant  to  be  a  profit-making  investment  should  be  able 
to  manufacture  goods  at  the  least  possible  outlay,  and  dis- 
pose of  them  to  an  ever-ready  market.  It  should  not  be  bur- 
dened with  a  load  of  fixed  charges  in  the  way  of  a  heavy 
bonded  indebtedness  or  preference  dividends,  neither  should 
its  official  salary  list  be  unduly  large  nor  its  administrative 
expenses  excessive. 

If  a  promoter  regards  a  proposition  merely  as  a  device  to 
inveigle  money  from  the  confiding  public,  he  will  not  concern 
himself  seriously  about  the  soundness  of  the  corporation's 
standing,  provided  he  is  able  to  sell  its  securities,  and  is 
safe  from  criminal  prosecution.  Sound  business  policy  does 
not  consist  in  gathering  together  a  heterogeneous  lot  of 
plants  and  factories  to  create  a  large  corporation.  The  size 
of  the  company  should  be  a  mere  incident  in  the  general 
scheme  of  instituting  a  profit-making  creation.  Indeed,  to 
increase  the  size  without  at  the  same  time  acquiring  compen- 
sating advantages  weakens  the  company.  The  burdens  of 
management  are  heavily  increased  unless  the  widening  scope 
of  the  plant's  activities  means  possibilities  of  obtaining 
cheaper  raw  materials,  of  developing  less  expensive  means  of 
production,  or  of  obtaining  better  and  more  secure  markets. 

Financiers  should  carry  out  the  idea  of  business  integra- 
tion rather  than  that  of  excessive  concentration.  Business 
integration  is  the  process  whereby  the  o-wners  of  an  enterprise 
secure  a  more  or  less  complete  control  of  all  the  steps  of 
manufacturing  and  distributing  a  commodity  from  the  raw 


BUSINESS  CONCENTRATION  AND  INTEGRATION     51 

materials  to  the  finished  product.^  Concentration,  on  the 
other  hand,  means  the  assembling  of  like  plants  'for  the 
purpose  of  eliminating  selling  competition.^  Consolidation 
means  a  combination  of  both  integration  and  concentration. 
All  large  corporations  are  to  some  extent  a  combination  of 
both  integration  and  concentration;  but  as  a  general  proposi- 
tion no  combination  can  be  secure  in  its  position  unless  some 
form  of  integration  is  dominant  in  its  consolidating  process. 
In  our  recent  development  there  have  been  brought  to 
prominent  notice  five  classes  of  consolidation,  and  each  one 
has  many  successful  concerns  represented  in  its  ranks.  These 
classes  may  be  stated  as  follows :   . 

1.  The  complete  integration  of  the  manufacturing  pro- 
cess, wherein  the  product  is  made  under  the  direction  of  one 
management  from  the  securing  and  preparing  of  the  raw 
material  to  the  placing  of  the  finished  goods  on  the  market. 

2.  The  integration  of  conveyance  and  manufacturing, 
and  the  concentration  of  factories.  Here  the  producer  does 
not  own  the  sources  of  raw  material,  but  controls  the  cheap- 
est possible  means  by  which  raw  materials  can  be  conveyed 
from  the  sources  of  supply  to  the  manufacturing  plants 
where  he  carries  on  the  manufacturing  process  through  every 
possible  phase  to  the  making  of  finished  products  from  the 
raw  materials. 

3.  An  integration  and  concentration  of  factories  and  dis- 
tributing houses.  In  this  case,  the  manufacturer  does  not 
own,  neither  does  he  control,  the  sources  of  supplies  or  the 
transportation  facilities.  He  builds  or  acquires  plants  which 
are  specially  adapted  to  handling  the  products  of  various  sec- 

^Cf.  "The  Integration  of  Industry  in  the  United  States,"  by 
William  Franklin  Willoughby,  Quarterly  Journal  of  Economics, 
November,  1901,  Vol.  16,  pp.  94-115. 

^Cf.  "The  Concentration  of  Industry  in  the  United  States,"  by 
William  Franklin  Willoughby,  Yale  Review,  May,  1898,  Vol.  7,  pp. 
72-94. 


52    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 
f 

tions  where  the  raw  commodities  are  made.  The  presence  of 
these  large  plants  in  a  community  does  not  necessarily  imply 
that  the  organization  will  force  unfair  price  concessions  from 
the  producers  of  the  raw  goods.  In  fact,  it  may  even  raise 
prices,  but  in  so  doing  it  is  assured  that  rival  concerns  must 
pay  at  least  an  equally  high  amount  for  the  same  or  for  even 
an  inferior  quality.  In  addition  to  securing  the  goods  on 
this  basis,  the  firms  further  guard  themselves  by  developing 
great  selling  departments  by  which  they  reach  the  consumer 
directly,  and  always  keep  an  outlet  for  their  manufactured 
products. 

4.  Integration  wherein  the  manufacturers  secure  profits 
by  utilizing  all  possible  by-products  which  may  be  derived 
as  the  primary  commodity  is  being  made. 

5.  Integration  and  concentration  wherein  the  product  is 
protected  by  patents  and  distinguishing  trademarks,  and  a 
market  is  created  for  the  goods  by  wide-spread  advertising. 
As  the  market  expands,  plants  are  erected  at  strategic  points 
to  facilitate  selling  and  lower  distributive  expenses. 

The  United  States  Steel  Corporation  is  the  classic  exam- 
ple of  the  first  of  these  combinations.  When  it  was  organized 
in  1901  it  included  thirteen  different  organizations  in  part 
or  whole,  and  since  that  time  it  has  acquired  no  less  than 
twenty  large  corporations.  If  we  examine  into  the  properties 
that  have  been  acquired  by  the  steel  corporation,  we  shall 
note  one  feature  that  reflects  the  profound  judgment  of  the 
moving  spirits  in  that  great  organization.  In  every  case 
where  an  acquisition  has  been  made,  the  properties  acquired 
have  been  ones  which  will  contribute  to  the  importance  of 
the  organization  in  one  of  several  ways. 

1.  Give  it  better  supplies  of  raw  material  which  will  be 
used  in  the  manufacture  of  iron  and  steel  products. 

2.  Give  it  better  transportation  facilities  and  cheaper 
means  of  bringing  the  raw  material  to  the  furnaces  and  mills, 
and  likewise  of  taking  the  finished  product  away. 


By  courtesy  oj  the  United  Statea  Steel  Corporal 


BUSINESS  CONCENTRATION  AND  INTEGRATION     58 

8.  Give  it  an  outlet  for  its  own  products  by  making  fin- 
ishing plants  which  will  change  its  unfinished  goods  into 
commodities  that  can  be  directly  consumed. 

4.  Give  it  control  of  complete  units  which  are  situated  at 
strategic  points  with  respect  to  market  and  raw  materials. 
The  map  (Fig.  5)  shows  the  extent  of  the  corporation's 
properties  and  the  types  of  plants  and  jjossessions  it  holds. 

Even  if  we  are  skeptical  of  the  high  values  placed  upon 
the  following  inventories,  we  cannot  fail  to  be  impressed 
with  the  tyi^es  of  properties.  The  industry  is  completely  in- 
tegrated. The  following  tables  have  been  taken  from  Mun- 
sey^s  Mafjazine  and  the  "Eighth  Annual  Report  of  the  Steel 
Corporation."  The  first  one  shows  an  inventory  of  the 
properties  of  the  corporation.  The  second  one  compares  the 
production  of  the  properties  for  the  years  1908  and  1909. 
In  looking  over  the  first  table  we  are  struck  by  the  mere 
physical  bigness  of  the  corporation.  The  second  one  gives 
us  an  insight  into  its  multitudinous  activities.  In  the  one 
we  see  the  possession  of  all  material  necessary  to  change 
crude  material  into  any  grade  or  kind  of  finished  material, 
from  pig-iron  into  the  most  highly  finished  steel  product. 
The  second  table  shows  us  what  these  plants  produce.  It 
tells  us  that  the  corporation  is  ready  to  market  all  kinds  of 
materials. 

AN   INVENTORY   OF  THE   PROPERTIES  ^ 

Ore  and  Mining  Timber  Properties 

Unmined  ores  located  in  the  Lake  Su- 
perior districts  on  the  Marquette,  Meno- 
minee, Gogebic,  Vermilion  and  Mesaba 
iron  ranges,  and  in  the  Baraboo  district, 
Wisconsin,  in  all  an  estimated  tonnage  of 
1,182,815,200  tons  of  all  grades,  exclusive 
of  the  Great  Northern  ores,  at  sixty 
cents  per  ton $709,689,120 

^  This  inventory  appeared  in  Munsey's  Magazine,  June,  1908^ 
and.  is  quoted  by  permission  of  Mr.  Frank  A.  Munsey. 


54    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 


Brought  Forward $709,689,120 

Mining  plants,  improvements  and  devel- 
opment work,  at  active  mines,  including 
mine  and  stripping  equipment,  tracks, 
etc.,  and  cost  of  removing  overburden 
from  ore  not  yet  mined,  mine  dwellings, 
etc. 23,432,886 

Timber  property— 803,868,000  feet  of 
standing,  mining,  and  saw-log  stock ; 
1,461,000  cords  of  logging,  pulp  wood 
and  cord  wood ;  191,837  acres  of  land — 
all  located  on  above  named  iron  ranges. .      5,744,011— $738,866,017 

Coal  and  Coke  Properties 

Unmined  coking  coal  in  the  Connells- 
ville  region,  Pennsylvania — 60,003  acres 
owned  (coal  only,  not  including  surface), 
1.515  acres  leased  on  royalty  basis,  also, 
21,100  acres  of  surface ;  and  (of  which 
750  acres  are  river  front)  owned  in  con- 
nection with  foregoing 93,656,200 

Unmined  coking  coal  in  the  Pocahontas 
region.  West  Virginia — 65,497  acres  land 
leased — valuation  Id  equity  above  royal- 
ties       3,274,850 

Unmined  steam  and  gas  coal  in  the  Pitts- 
burg district  in  Pennsylvania,  in  Ohio, 
Indiana,  and  Illinois— 30,252  acres  owned 
(coal  only,  not  including  surface),  3,548 
acres  leased  on  royalty  basis ;  also,  998 
acres  of  surface  land  owned  in  connec- 
tion with  foregoing 8,898,828 

Coking  plants,  comprising  20,225  ovens 
in  the  Connellsville  region  and  2,151 
ovens  in  the  Pocahontas  region,  including 
mine  openings,  shafts,  slopes,  tipples, 
power-plants,  mine  and  over  tracks,  and 
all  machinery  and  equipment  in  connec- 
tion with  the  mining  and  coking  of  coal 
at  the  above  plants ;  also,  complement 
of  tenement-houses  for  employees 29,875,150 

Coal  mining  and  shipping  plants  at  mines 
in  the  Connellsville  and  Pittsburg  dis- 
tricts, not  constructed  in  connection  with 
coking  plants 2,741,412 


garriQd  ForwM  ..,,...,,.,..,,,..  .$138,446,440    $738,866,017 


BUSINESS  CONCENTRATION  AND  INTEGRATION     55 

Brought  Forward $138,446,440  $738,866,017 

Miscellaneous,  including  standard-gauge 
railroad  equipment  (6  locomotives,  700 
steel  cars,  and  1,694  wooden  cars),  op- 
erated in  connection  with  the  foregoing 
properties  ;  water-pumping  stations,  pipe 
lines  and  reservoirs ;  shops,  office  build- 
ings, stores,  telephone-lines,  live  stock, 
etc 4,393,339—  142,839,779 


Limestone  and  Natural  Gas 

Unquarried  limestone  located  at  various 
places  in  Pennsylvania,  West  Virginia, 
Ohio,  Illinois,  Wisconsin  and  Michigan, 
at  an  estimated  valuation  of  about  three 
cents  per  ton,  including  quarry  equip- 
ment        2,619,529 

Gas  territory  in  Pennsylvania  and  West 
Virginia  (leased),  in  all  208,985  acres,  on 
which  there  are  376  gas  wells  and  5  oil 
wells,  with  about  600  miles  of  pipe  lines, 
12  pumping  stations,  telephone  lines,  field 
equipment,   etc 10,360,940—    12,980,469 


Transportation  Properties 

Standard  gauge  railroad  lines,  including 
the  Bessemer  &  Lake  Erie,  233  miles ; 
Chicago,  Lake  Shore  &  Eastern,  282 
miles ;  Duluth  &  Iron  Range,  229  miles ; 
Duluth,  Missabe  &  Northern,  274  miles ; 
.Elgin,  Joliet  &  Eastern,  230  miles,  and 
other  lines,  107  miles — in  all,  1,355  miles 
of  main  lines  and  branch  lines,  with  298 
miles  of  second  tracks  and  659  miles  of 
sidings  and  yard  tracks,  but  exclusive  of 
docks  and  equipment 91,517,750 

Railroad  equipment— 692  locomotives  and 

37,902  cars  of  various  classes 42,348,825 

Eight  forwarding  ore-docks  on  Lake  Su- 
perior and  two  receiving  ore-docks  on 
Lake  Erie,  including  equipment 7,396,700 

Seventy-six  ore  and  freight  carrying 
steamers  and  twenty-nine  barges,  plying 
on  the  Great  Lakes,  with  a  total  carrying 
capacity  of  635,250  tons  of  iron  ore 21,440,700—  162,703,975 

Qarri^d  Fon^^a^d  ,,,,...,,, ,.,.,.,,,,,,,,,,,,,..$1,057,390,24Q 


50    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

Brought  Forward .$1,057,390,240 

Manufacturing  Properties  {Exclusive  of 

Gary,  Indiana) 
Furnaces,  mills,  and  factories,  number- 
ing in  all  145  separate  plants,  including 
the  sites  (a  total  area  of  8,089  acres), 
and  all  equipment  and  appurtenances 
other  than  manufacturing  supplies  and 
product  on  hand 382,248,897 

Gary,  Indiana,  Plant 

Actual  expenditure  to  January  1,  1909, 
for  the  real  estate,  about  9,000  acres ; 
for  construction  work  on  the  new  steel 
plant,  for  development  and  construction 
work  in  the  city  of  Gary,  and  for  connect- 
ing railroad  work 24,063,388 

Stind7-y  Real  Estate 
Situated  contiguous  to  manufacturing 
plants  and  improvements  thereon  (prin- 
cipally dwellings  for  employees)  ;  also, 
unimproved  tracts  of  land  owned,  avail- 
able for  manufacturing  sites  and  for 
terminal  railroad  and  dock  facilities,  etc. 
Value  of  real  estate,  exclusive  of  im- 
provements thereon $4,975,900 

Improvements  thereon 1,719,073  —    6,694,973 

Tennessee  Coal  &  Iron  Company 
Including  ore,  coal,  manufacturing  plants 
and  general    equipments  of    a   complete 
and  independent  steel  manufacturing  con- 
cern         50,000,000 

Net  Liquid  Assets,  December  31,  1907 
Includes  cash,  and   accounts  receivable, 
inventories  and  investments,  in  excess  of 
current  liabilities 26i,789,885 

Total $1,782,187,383 

The  production  of  the  several  subsidiary  properties  for  the  year 
1909,  compared  with  the  results  for  the  year  1908,  was  as  follows  :  ^ 

'Quoted  from  page  17,  Eighth  Annual  Report  of  the  U.  S.  ^teel 
Corporatioik' 


BUSINESS   CONCENTRATION  AND   INTEGRATION    57 


Products. 


Iron  Ore  Mined. 

Marquette  Range 

Menominee  Range 

Gogebic  Range 

Vermilion  Range 

Mesaba  Range 

Tennessee  Coal,  Iron  &  R.  R.  Co.'s  Mines 

Total 

Coke  Manufactured. 

Bee-Hive  Ovens 

By-Product   Ovens 

Total 

Coal  Mined,  not  including  that  used  making  coke 
Limestone  Quarried 

Blast  Furnace  Production. 

Pig-Iron 

Spiegel 

Ferro-Manganese  and  Silicon 

Total 

Steel  Ingot  Production. 

Bessemer  Ingots 

Open  Hearth  Ingots 

Total 

Rolled  and  Other  Finished  Steel  Products  for  Sale. 

Steel  Rails 

Blooms,  Billets,  Slabs,  Sheet  and  Tin  Plate  Bars 

Plates 

Heavy  Structural  Shapes 

Merchant  Steel,  Bars,  Hoops,  Bands,  Skelp,  etc. 

Tubing  and  Pipe 

Rods 

Wire  and  Products  of  Wire 

Sheets— Black,  Galvanized  and  Tin  Plate 

Finished  Structural  Work 

Angle  and  Splice  Bars  and  Other  Rail  Joints  . . 

Spikes,  Bolts,  Nuts  and  Rivets 

Axles 

Steel  Car  Wheels 

Sundry  Steel  and  Iron  Products 

Total 

Spelter 

Sulphate  of  Iron 

Universal  Portland  Cement 


1909 

1908 

Tons. 

Tons. 

899,002 

830,087 

1,359,415 

1,021.598 

1,312,701 

1,078.025 

1,066,474 

927,206 

16,968,592 

11,272,397 

1.824,863 

1.533,402 

23,431,047 

16,662,715 

11,896,211 

7,591,062 

1,693,901 

578,869 

13,590,112 

8,169,931 

3,089,021 

3,008,810 

3,496,071 

2,186,007 

11,436,570 

6,810,831 

80,942 

74,716 

100,838 

48,861 

11,618,350 

6,934,408 

5,846,300 

4,055,275 

7,508,889 

3,783,438 

13,355,189 

7,838,713 

1,719,486 

1.050.389 

675,614 

551,106 

729,790 

312,470 

658,516 

313,733 

1,290,970 

577,591 

1,013,071 

654,428 

139.149 

93.406 

1,607,689 

1.275,785 

1,024.985 

770,321 

530,766 

403.832 

190,226 

84,669 

72.076 

40,252 

68.366 

24,057 

67,985 

7.223 

70.971 

47.670 

9.859,660 

6,206,932 

27,853 

28,057 

33,582 

26,411 

Bbls. 

Bbls. 

5,786,000 

4,535,300 

58    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

The  United  States  Steel  Corporation,  with  its  tremendous 
possessions,  is  capable  of  controlling  about  60  per  cent  of  the 
steel  output  of  the  country.  If  its  rivals  should  ever  begin 
an  aggressive  onslaught  on  its  markets,  the  company  could 
easily  defend  itself  by  meeting  all  cuts  in  prices.  Indeed, 
with  its  great  possessions  and  equipment,  the  United  States 
Steel  Corporation  could  carry  warfare  into  the  enemy's  camp 
and  reduce  prices  to  a  ruinous  figure  for  all  outsiders. 

In  spite  of  a  number  of  strong  temptations  the  company 
has  pursued  a  very  commendable  price  policy.  After  the 
1907  panic  the  Steel  Trust  was  the  last  concern  to  attempt  to 
secure  orders  by  cutting  prices,  and  it  finally  lowered  only 
as  a  measure  of  self-defense  against  secret  reductions  of  the 
independent  rivals. 

The  company  has  solved  its  market  problem  by  securing 
control  of  the  raw  materials  and  the  transportation  facilities, 
and  by  placing  complete  producing  units  in  such  positions 
that  they  are  accessible  at  many  consuming  points. 

The  Standard  Oil  Company  is  the  best  representative  of 
the  second  type  of  consolidation.  This  organization  obtains 
its  raw  materials  by  leasing  oil  lands  and  securing  exclusive 
purchase  options  on  the  output  of  oil  fields.  It  does  not 
attempt  to  buy  outright  great  stretches  of  oil-producing 
territory,  but  rather  seeks  to  maintain  its  position  by  devel- 
oping along  two  lines,  viz. : 

1.  It  has  obtained  the  best  and  cheapest  means  for  the 
handling  and  the  transportation  of  petroleum  from  the  fields 
to  the  refineries,  and  from  refineries  to  the  markets. 

2.  It  has  the  most  complete  set  of  refineries  in  existence, 
and  has  located  them  at  strategic  points  throughout  the 
country. 

In  the  distribution  of  petroleum  the  Standard  Oil  Com- 
pany employs  8,000  miles  of  trunk  pipe  lines,  with  75,000 
miles  of  feeders  from  wells ;  storage  tanks  for  crude  oil,  hold- 
ing 82,000,000  barrels  J    10,000  tank  cars  in  America  and 


BUSINESS  CONCENTRATION  AND  INTEGRATION     59 

2,000  abroad;  60  bulk  steamers  for  ocean  traffic  and  12  for 
foreign  coasting  trade,  with  150  steamers  and  barges  at 
home;  3,000  tank  stations  in  America  and  5,000  elsewhere.^ 

The  managers  of  the  concern  have  developed  refining 
apparatus  which  makes  feasible  every  possible  saving,  and 
enables  the  preparation  of  all  by-products.  The  process  of 
manufacture  does  not  end  with  the  mere  making  of  the  oil. 
The  cans  which  are  destined  to  carry  illumination  into  the 
peasant  huts  of  rugged  Italy,  and  the  barrels  which  will  hold 
lubricant  for  the  shops  of  our  own  mid-continent  are  all 
made  in  the  refineries. 

The  map  (Fig.  6)  on  the  following  page  is  compiled  from 
the  report  of  the  Commissioner  of  Corporations,  entitled 
"The  Transportation  of  Petroleum."  On  it  are  shown  the 
location  of  the  refineries  of  the  Standard  Oil  Company  and 
its  competitors,  and  likewise  the  oil  fields,  pipe  lines,  and 
the  territory  supplied  by  the  refineries  of  the  Standard  Oil 
Company.  It  is  interesting  to  note  the  advantage  that  the 
Standard  Oil  Company  takes  of  water  transportation  wher- 
ever it  is  possible.  The  seaboard  territoiy  has  its  most  im- 
portant points  at  Portland,  Me.,  Boston,  Providence,  New 
London,  Wilson  Point,  Conn.,  Richmond,  Wilmington, 
Charleston,  Savannah,  and  Jacksonville,  all  reached  by  boat. 
From  these  ports  the  oil  is  distributed  inland  to  the  local 
territories  by  rail. 

The  following  excerpt  is  from  the  text  of  the  report  above 
cited :  ^ 

"Advantages  Due  to  Geographical  Distribution  of  Re- 
fineries.— The  great  advantages  which  the  Standard  Oil  Company 
enjoys  over  its  competitors  with  respect  to  transportation  are  un- 
doubtedly in  part  the  direct  outgrowth  of  the  enormous  scale  on 
which  it  conducts  business  and  of  the  favorable  location  of  its  re- 
fineries.    They  are  in  some  degree,  at  least,  natural  advantages. 

1  Cf.  Moody's  Mamml,  1909,  p.  2786. 
*  "Transportation  of  Petroleum,"  p.  60. 


•PI  ".'J 


BUSINESS  CONCENTRATION  AND  INTEGRATION     61 

Disregarding  the  question  of  the  origin  of  the  power  of  the  Stand- 
ard Oil  Company,  and  considering  only  its  present  position,  the 
advantages  which  it  possesses  with  respect  to  transportation  are 
certainly  in  part  independent  of  any  present  discriminations  from 
railroad  companies. 

"In  the  first  place,  the  fact  that  the  Standard  Oil  Company  has 
numerous  refineries  gives  it  a  marked  advantage  over  the  compet- 
itor who  has  only  one.  Even  were  it  not  for  the  transportation 
of  crude  oil  by  trunk  pipe  lines  to  long  distances,  and  if  the  refin- 
eries were  all  in  or  near  the  oil  fields,  by  having  several  refineries 
the  Standard  Oil  Company  would  still  be  nearer  to  many  markets 
than  its  competitors.  Thus,  by  operating  refineries  in  the  oil  fields 
of  Pennsylvania,  Ohio,  Texas,  Kansas,  Colorado  and  California,  it 
could  supply  each  section  of  the  country  from  the  nearest  plant, 
and  could  save  much  in  the  cost  of  transportation  as  compared 
with  a  refiner  restricted  to  a  single  distributing  point. 

"Advantages  Due  to  Pipe  Line  Transportation.— This  ad- 
vantage of  location  is,  however,  very  greatly  increased  by  the  use 
of  trunk  pipe  lines  to  transport  crude  oil  to  refineries  much  nearer 
to  great  centers  of  consumption  than  the  oil  fields  themselves. 
The  Standard  operates  enormous  refineries  at  the  sea-board.  These 
are  much  nearer  to  several  great  centers  of  population  than  the 
majority  of  competing  refineries,  and  they  also  offer  the  advantage 
of  water  transportation  to  a  large  area.  Similarly,  the  Standard's 
great  refinery  at  Whiting  is  several  hundred  miles  nearer  to  the 
markets  of  the  West  than  most  of  the  independent  refineries. 

"The  advantage  of  the  location  of  the  sea-board  refineries,  and 
of  the  Whiting  refinery,  grows  out  of  the  fact  that  the  cost  of  pipe 
line  transportation  to  them  from  the  oil  fields  is  much  less  than 
the  cost  of  rail  transportation,  which  the  competitors  have  for  the 
most  part  to  pay  in  order  to  reach  the  same  points." 

This  quotation  has  added  significance,  because  it  is  taken 
from  a  document  hostile  to  the  Standard  Oil  Company.  The 
report  clearly  shows  that  the  founders  of  the  organization 
saw  two  things :  the  importance  of  developing  the  cheapest 
methods  of  transportation  and  the  advantages  of  strategic 
locations.  It  is  those  two  factors  which  will  account  for 
its  permanent  success. 

An  excellent  illustration  of  the  third  class  of  consolida- 


62    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

tion  is  afforded  by  the  American  Tobacco  Company.  This 
concern,  according  to  the  report  of  the  Commissioner  of  Cor- 
porations in  1909,  consists  of  eighty-six  companies  which 
have  an  aggregate  capitalization  of  over  $450,000,000,  in- 
chiding  bonds.  This  would  be  reduced  to  the  net  amount  of 
$316,000,000,  of  stocks  and  bonds  in  the  hands  of  the  pub- 
lic if  we  were  to  eliminate  duplication  of  intercompany 
ownership  of  securities.^  The  American  Tobacco  Company 
began  its  monopolistic  combination  in  1890  with  the  union 
of  the  five  principal  cigarette  manufacturers  in  the  country, 
in  this  way  securing  control  of  90  per  cent  of  the  cigarette 
business  of  the  United  States. 

In  1891,  it  began  the  policy  of  extending  its  dominion 
over  other  fields  of  the  tobacco  industry.  By  1894,  it  started 
a  vigorous  campaign  to  secure  the  plug-tobacco  business, 
and  by  1898  the  competitors  of  the  American  Tobacco  Com- 
pany were  willing  to  be  absorbed.  After  it  had  secured  con- 
trol of  the  cigarette  and  plug  business,  a  powerful  group  of 
financiers,  among  whom  were  Thomas  F.  Ryan,  P.  A.  B. 
Widener,  and  others  bought  up  the  Blackwell's  Durham  To- 
bacco Company,  which  was  an  important  manufacturer  of 
smoking  tobacco,  and  the  National  Cigarette  Tobacco  Com- 
pany. In  addition  to  those  companies,  they  had  secured  an 
option  on  the  controlling  interest  of  the  Liggett  &  Meyers 
Tobacco  Company,  the  control  of  which  was  exceedingly  im- 
portant to  the  American  Tobacco  Company.  The  American 
Tobacco  Company  at  once  realized  the  importance  of  the 
movement,  and  willingly  made  concessions  by  which  this 
new  combination  was  made  a  part  of  the  old.  A  further 
integration  and  concentration  was  made  in  1900  by  the  ac- 
quisition of  the  American  Snuff  Company,  which  iiicluded 
all  the  important  American  and  Continental  companies  doing 

1  "Report  of  the  Commissioner  of  Corporations  on  the  Tobacco 
Industry,"  Part  I,  p.  1, 


BUSINESS  CONCENTRATION  AND  INTEGRATION     63 

business  in  this  country.  Further  .absorption  was  brought 
about  in  1904,  when  the  foreign  tobacco  interests  became  a 
part  of  the  American  Tobacco  Company. 

In  1901,  the  tobacco  combination  took  another  step  to- 
ward integration  by  the  organization  of  the  American  Cigar 
Company.  By  1906,  it  had  about  15  per  cent  of  the  cigar 
output  of  the  United  States;  but  it  has  not  been  so  suc- 
cessful in  dominating  the  cigar  business  as  it  was  in  the 
cigarette,  smoking  tobacco,  plug  tobacco,  and  snuff  busi- 
nesses. 

In  1898,  the  tobacco  combination,  to  secure  for  itself  a 
sure  means  of  distributing  its  goods,  started  the  policy  of 
subsidizing  jobbing  houses  and  wholesalers.  By  1906,  it 
owned  stock  in  the  following  corporations  engaged  in  jobbing 
cigars  and  tobaccos :  ^ 

M.  Blaskower  Company,  San  Francisco,  Cal. 

R.  D.  Burnett  Cigar  Company,  Birmingham,  Ala. 

Cliff  Weil  Cigar  Company,  Richmond,  Va. 

J.  &  B.  Moos,  Chicago,  111. 

J.  &  B.  Moos  Company,  Cincinnati,  Ohio. 

Le  Compt,  Dusel  &  Goodloe,  Philadelphia,  Pa. 

J.  J.  Goodrum  Tobacco  Company,  Atlanta,  Ga. 

Louisiana  Tobacco  Company,  New  Orleans,  La. 

Smokers'  Paradise  Company,  Atlantic  City,  N.  J. 

Jordan,  Gibson  &  Baum,  Memphis,  Tenn. 

Not  only  has  the  American  Tobacco  Company  entrenched 
itself  in  the  jobbing  business,  but  it  has  even  gone  farther 
by  securing  the  control  of  powerful  retail  stores.  In  1901,  a 
concern  by  the  name  of  the  United  Cigar  Stores  Company 
was  incorporated  in  New  Jersey.  In  1906,  it  had  an  out- 
standing capital  of  $1,950,000,  of  which  the  tobacco  combi- 
nation held  all  the  preferred  stock  and  bonds  and  $340,000 

^  "Report  of  the  Commissioner  of  Corporations  on  the  Tobacco 
Industry,"  Part  I,  p.  311. 
ft 


64    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

of  common  stxack,  leaving  only  $110,000  of  common  stock 
outside  of  its  control.  In  addition  to  the  United  Cigar  Stores 
Company  of  New  Jersey,  the  American  Tobacco  Company 
was  controlling,  through  the  United  Cigar  Stores  Company, 
the  following  svibsidiary  corporations :  ^ 

United  Cigar  Stores  Company  (Incorporated),  of  Illinois. 

United  Cigar  Stores  Company  (Incorporated),  of  Rhode 
Island. 

United  Cigar  Stores  Company  Agency. 

The  Royal  Company. 

Moebs  Cigar  Stores  Company. 

\¥illiam  Baeder  &  Co. 

United  Merchants  Realty  and  Improvement  Company. 

The  total  number  of  stores  owned  and  controlled  by  these 
companies,    including  the  parent  company,   amounted,    in 

1906,  to  892.2  jjj  addition  to  this  there  were  a  number  of 
premium  stations,  depots,  and  the  National  Cigar  Stands 
Company,  which  was  closely  affiliated  with  the  American 
Tobacco  Company  by  heavy  loans  .made  by  the  latter  com- 
pany.    The  National  Cigar  Stands  Company  on  March  2, 

1907,  had  2,062  contracts  in  force  with  retail  druggists 
throughout  the  country.  ^ 

I'his  does  not  complete  the  retail  connections  controlled 
by  the  Tobacco  Combination.  Jobbing  houses  do  a  retail 
business  in  connection  with  their  other  affairs,  and  they  are 
very  closely  affiliated  with  the  large  corporations.  The  most 
important  of  these  concerns  are  the  Acker,  Merrall  &  Condit 
Company  of  New  York  City,  which  operates  ten  stores  in 
New  York  and  has  branches  in  Asbury  Park,  Baltimore, 
Md. ,  Far  Rockaway,  Flushing,  Greenwich,  Conn. ,  and  seven 
other  stores  in  the  immediate  vicinity  of  New  York  City. 

^  "Report  of  the  Commissioner  of  Corporations  on  the  Tobacco 
Industry,"  Parti,  p.  312. 

2 Ibid.,  p.  313.  3 Ibid.,  p.  316. 


BUSINESS  CONCENTRATION  AND  INTEGRATION     65 

Besides  the  Acker  Company,  the  Tobacco  Combination  con* 
trols :  * 

Cliff  Weil  Company  (Incorporated) ,  Richmond,  Va. 

J.  J.  Goodnim  Tobacco  Company,  Atlanta,  Ga. 

R.  D.  Burnett  Cigar  Company,  Bimiingham,  Ala. 

Le  Compt,  Dusel  &  Goodloe,  Philadelphia,  Pa. 

Further  integration  of  the  Tobacco  Combination's  busi- 
ness is  evident  in  its  ownership  of  concerns  which  manufac- 
ture tobacco  accessories.  The  following  list  of  companies 
engaged  in  contributory  enterprises,  in  addition  to  the  above 
mentioned,  is  taken  from  the  commissioner's  report:  ^ 

Mac  Andrews  &  Forbes  Company,  Manufacturers  of  Lico- 
rice Paste.  They  have  almost  a  complete  monopoly  of  this 
important  raw  material  for  the  tobacco  business. 

Mengel  Box  Company. 

Columbia  Box  Company. 

Tyler  Box  Company. 

Golden  Belt  Manufacturing  Company. 

Conley  Foil  Company. 

Johnston  Tin  Foil  and  Metal  Company. 

American  Machine  and  Foundry  Company. 

New  Jersey  Machine  Company. 

International  Cigar  Machinery  Company. 

Standard  Tobacco  Stemmer  Company. 

Garson  Vending  Machine  Company. 

Kentucky  Tobacco  Product  Company. 

Kentucky  Tobacco  Extract  Company. 

Manhattan  Briar  Pipe  Company. 

Baltimore  Briar  Pipe  Company. 

Amsterdam  Supply  Company. 

Thomas  Cusack  Company,  a  bill-posting  concern. 

Florodora  Tag  Company.  ^ 

^  "Report  of  the  Commissioner  of  Corporations  on  the  Tobacco 
Industry, "  pp.  315,  316. 

2 Ibid.,  pp.  16,  17.  8 Ibid.,  p.  24,  bottom. 


66    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

In  looking  over  this  list  of  factories  and  enterprises  whicl] 
the  Tobacco  Combination  owns  and  controls,  one  cannot  help 
being  impressed  with  the  substantial  unity  of  its  acquisi- 
tions. Those  factories  which  do  not  make  some  form  of 
tobacco,  manufacture  something  which  is  exceedingly  useful 
for  the  tobacco  producer.  The  tin-foil  comj^any  make  the 
wrapping  for  the  various  kinds  of  products.  The  box  com- 
pany's entire  product  is  used  in  casing  the  output.  The 
various  ingredients  necessary  for  the  production  of  the  to- 
bacco are  likewise  under  their  control,  as  one  can  see  from 
their  ownership  of  the  licorice  business.  "When  it  comes  to 
distribution,  it  o-v\tis  not  only  stores,  but  advertising  con- 
cerns. The  Florodora  Tag  Com^^any  formerly  did  an  im- 
mense business  in  the  distribution  of  premiums.  When  it 
does  not  actually  make  the  products  it  takes  means  to  secure 
the  raw  materials  at  the  lowest  possible  cost.  The  Amster- 
dam Supply  Company  was  organized  for  the  sole  purpose  of 
acting  as  a  purchasing  agent  for  the  American  Tobacco  Com- 
pany. 

The  by-product  type  of  integration  must  have  two  essen- 
tials before  a  firm  can  afford  to  spend  money  on  equipment 
to  work  up  its  subsidiary  material. 

1.  It  must  have  the  assurance  that  the  market  condi- 
tions wdll  be  such  that  the  by-products  will  always  have  a 
ready  sale. 

2.  It  must  have  a  main  industry  sufficiently  large  to 
provide  enough  material  to  keep  the  by-product  plants  con- 
tinually running. 

As  a  consequence  those  industries  that  have  developed 
the  by-product  features  are  almost  invariably  large  concerns, 
and  they  are  usually  very  active  in  developing  their  business 
by  various  schemes  to  keep  their  names  before  the  public 
and  create  a  demand  for  their  goods. 

The  beef-packing  industries  present  the  most  widely 
known  ejtamplQ  of   the  by-product  type   of   integration. 


BUSINESS  CONCENTRATION  AND  INTEGRATION     67 

Merely  to  mention  the  by-products  obtained  in  the  course 
of  slaughtering  is  a  task  in  itself.  The  average  live  weight 
of  a  beef  is  between  1,000  and  1,100  pounds,  while  the 
dressed  weight  ranges  between  575  and  650  pounds.  *  Within 
a  recent  period,  only  the  hides  and  tallow  of  the  450  pounds 
of  non-edible  material  were  saved.  At  present  every  ounce 
of  this  waste  product  is  compelled  to  yield  some  tribute  to 
the  packer.  From  the  horns  and  hoofs  are  made  various 
grades  of  glues,  buttons,  and  hair-pins,  and  they  are  made 
the  basis  for  the  manufacture  of  cyanide  and  chrome.  The 
albumin  in  the  blood  is  used  to  make  an  insoluble  printers' 
ink.  It  is  also  used  by  tanners  to  finish  leather,  and  by  sugar 
refiners  to  make  possible  the  inviting  whiteness  of  their 
product.  Dried  blood,  bones,  tankage,  and  the  ground  waste 
of  hoof  and  horn  scraps  make  a  fertilizer  rich  in  nitrogen 
which,  when  combined  with  acid  phosphate,  becomes  the 
source  by  which  otherwise  infertile  soil  is  made  to  bring 
forth  the  necessaries  and  luxuries  of  our  tables.  The  wool 
from  the  packing-house  sheep  is  made  into  fabrics  to  clothe 
us,  but  before  it  is  given  to  the  textile  worker,  the  oil  is  ex- 
tracted, making  the  non-shrinking  basis  of  wool  soap  and 
also  the  essence  of  various  soothing  skin  lotions  and  toilet 
preparations  designed  to  beautify  the  users.  If  we  are  sick, 
our  jaded  appetite  may  be  tempted  to  accept  gelatine  ex- 
tracted from  the  bones  of  calves ;  if  convalescent,  our  system 
may  be  induced  to  increase  in  strength  by  absorbing  "Solu- 
ble Beef,"  the  predigested  and  concentrated  substance  of 
meat.  The  intestines  of  the  animals  are  the  casings  for  sau- 
sage which  is  made  from  meat  otherwise  unsalable.  The 
gun  we  carry  on  a  hunting  trip  is  hardened  with  bone  car- 
bon, the  handle  of  the  knife  which  we  use  to  dress  our  game 
is  from  the  packing  house.     If  camp  fare  disagrees  with  our 

*  "  Report  of  the  Commissioner  of  Corporations  on  the  Beef  In- 
dustries,"  pp.  202, 203. 


68    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

stomach,  we  can  vary  our  diet  with  beef  extract  and  allay 
the  pains  of  indigestion  with  pepsin  and  pancreatin.  The 
baby  starts  out  in  life  using  a  bone-capped  nursing  bottle 
and  teething  ring.  If  in  later  years  nature  proves  niggardly 
in  her  gift  of  hair,  the  switch  on  the  end  of  the  beef's  tail 
will  be  offered  to  supply  the  deficiency.  Collar  buttons,  pipe 
stems,  and  dice,  brewers'  isinglass,  and  brushes,  soap  and 
glycerine,  washing  powder,  and  sand  paper  are  all  products 
sent  forth  from  the  various  departments  of  these  great  con- 
cerns. So  minutely  has  the  by-product  feature  been  carried 
out  that  the  glands  of  100,000  sheep  are  carefully  preserved 
and  treated  to  produce  one  pound  of  suprarenalin,  a  sub- 
stance whose  astringent  qualities  have  proven  invaluable  in 
delicate  surgical  operations.-' 

The  National  Biscuit  Company  and  the  Singer  Manufac- 
turing Company  are  two  good  examples  of  the  fifth  type  of 
integration.  Both  concerns  have  fortified  every  distinguish- 
ing feature  and  improvement  about  their  articles  by  patents 
and  trademarks.  Both  concerns  have  been  very  careful  to 
guard  the  quality  of  their  goods,  and  neither  forgets  that 
advertising  is  necessary  for  publicity.  Each  one  has  built 
plants  at  various  places  to  make  easier  the  distribution  of 
products  to  the  consumers  located  in  various  districts. 

The  National  Biscuit  Company  has  sixty  manufacturing 
plants  situated  at  various  points  in  the  United  States.  2  The 
Singer  Company  has  plants  not  only  in  the  United  States, 
but  also  in  Canada  and  Scotland.^  It  is  a  common  practice 
for  concerns  to  erect  plants  in  foreign  countries  when  duties 
on  their  products  are  high,  because  in  so  doing  they  avoid 
the  tariff  charges,  and  are  thus  able  to  compete  with  the 
foreign  manufacturers  on  more  equal  grounds. 

^Cf.  "The  Packers,  the  Private  Car  Lines  and  the  People,"  by 
J.  Ogden  Armour,  Chapter  IX,  p.  201. 
^Moody's  Manual,  1908,  p.  2397. 
3Ibid..  1908,  p.  2517. 


BUSINESS  CONCENTRATION  AND  INTEGRATION    69 

In  actual  practice  almost  every  large  concern  is  success- 
ful, because  it  has  utilized  to  a  greater  or  less  extent  several 
of  the  above-mentioned  methods  of  integraiion.  None  of 
the  companies  in  the  above  illustrations  are  successful  ex- 
clusively because  of  their  characteristic  type  of  integration. 
The  United  States  Steel  Corporation,  for  instance,  derives  a 
large  part  of  its  income  from  its  extensive  by-product  manu- 
facturing, while  the  packing  houses  are  exceedingly  careful 
to  cultivate  every  possible  market.  They  advertise  their 
goods  broadcast,  and  have  their  agents  everywhere  drum- 
ming up  trade. 

The  question  that  the  directors  have  to  decide  is,  how  far 
shall  we  push  expenditures  along  any  one  line  of  consolida- 
tion? Will  a  thousand  dollars  spent  in  improving  the 
methods  of  manufacture  give  as  large  a  return  as  the  same 
amount  spent  in  advertising?  Will  lowering  the  cost  in- 
crease our  trade  or  profits  so  much  as  changing  our  selling 
methods  or  securing  control  of  raw  materials? 

In  the  last  analysis,  all  of  these  consolidations  seek  to  do 
one  thing — to  secure  sufficient  control  of  the  market  to  assure 
the  manufacturer  a  profitable  outlet  for  his  goods.  Some 
types  of  industries  can  secure  this  control  most  readily  by 
obtaining  the  sources  of  raw  materials,  some  by  cutting 
factory  costs,  and  others  can  get  it  only  by  developing  the 
selling  dex^artment  to  a  high  degree  of  efficiency.  All  are 
struggling  for  the  patronage  of  the  public,  and  the  strongest 
appeal  any  one  of  them  can  make  is  to  give  the  best  value 
for  the  lowest  price.  When  one  secures  control  of  the  raw 
materials,  he  can  make  the  lowest  price  in  any  community 
simply  by  compelling  his  rivals  to  pay  a  higher  amount  for 
the  crude  products.  If,  however,  the  supply  of  raw  materials 
is  such  that  all  can  purchase  on  an  equal  footing,  the  firm 
which  can  manufacture  with  the  least  cost  is  in  the  strongest 
position  to  gain  the  market,  provided  all  other  things  are 
equal.     In  many  instances,  the  best  methods  of  carrying  on 


70    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

an  industry  are  so  generally  known  that  the  rival  interests 
have  little  or  no  advantage  over  each  other  in  that  respect. 
In  those  cases,  the  victory  goes  to  either  the  one  who  hat, 
lowest  distribution  expenses  and  sells  the  cheapest,  or  to  the 
one  who  by  judicious  advertising  or  other  means  secures  a 
reputation  for  giving  superior  quality  for  standard  prices. 


CHAPTER  VI 

BUSINESS   SPECIALIZATION 

In  the  last  chapter  it  was  stated  that  consolidation  could 
take  place  in  the  field  of  raw  materials,  manufacturing  and 
selling.  To  secure  control  of  raw  materials  is  a  financial 
problem  that  requires  a  different  solution  in  every  individual 
case.  The  manufacturing  and  selling  phases  of  any  business 
must  be  handled  after  the  plant  has  been  located  and  con- 
structed. In  another  chapter  it  will  be  shown  that  even  the 
most  economical  construction  of  a  plant  is  almost  entirely 
dependent  ui^on  the  peculiarities  of  the  processes  that  go  on 
under  the  roof  of  the  structure. 

The  university  of  a  generation  ago  liad  few  departments, 
as  a  rule;  but  those  departments  taught  a  great  many 
branches.  At  that  time  a  man  could  be  Professor  of  Natural 
Philosophy,  and  within  that  domain  he  gave  instruction  in 
Geology,  Chemistry,  Physics,  Physical  Geography,  Miner- 
alogy, Meteorology,  and  perhaps  a  half  dozen  other  allied 
branches.  A  professor  of  Political  Economy  would  be  likely 
to  teach  Economic  History,  Economic  Theory,  Public  Fi- 
nance, Private  Finance,  Transportation,  Sociology,  and  an 
almost  indefinite  number  of  the  derived  topics.  How  differ- 
ent is  the  university  of  to-day.  Natural  Philosophy  has 
vanished  from  all  curricula.  Even  geology  is  broken  up  into 
Historical  Geology,  Paleontology,  Inorganic  Geology,  and  a 
half  dozen  other  subdivisions.  He  is  a  bold  man  who  pre- 
tends to  know  more  than  one  or  tn^o  of  those  subdivisions 
with  any  great  degree  of  completeness.  The  science  of  Politi- 
1J9I  Economy  h^s^  been  broken  up  into  Economics  and  Sociol- 

71 


72    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

ogy,  and  in  those  two  orders  of  social  science  we  find  special- 
ists who  do  not  care  to  teach  more  than  one  small  branch  of 
their  general  division.  At  the  present  time  we  have  profes- 
sors of  Transportation,  of  Insurance,  of  Farm  Economics, 
Accountancy,  Industrj^,  Commerce,  Finance,  and  a  host  of 
others.  In  the  past  we  had  the  tendency  to  hit  only  the  high 
places  in  our  sciences.  "We  were  broad  but  not  deep.  Our 
institutions  of  learning  have  carried  out  the  idea  of  speciali- 
zation in  education  to  exceedingly  fine  limits,  and  it  has 
resulted  in  incalculable  good  to  the  cause  of  knowledge. 

While  the  specialization  has  been  going  on  in  the  higher 
institutions  another  movement  has  been  taking  place.  The 
universities  are  getting  into  closer  and  more  sympathetic 
relations  with  the  high  schools,  and  even  with  the  grade 
schools,  until,  at  the  present  time,  in  some  states  the  entire 
school  system  is  gradually  getting  welded  into  one  big  unit 
which  has  for  its  object  the  most  perfect  training  that  is 
possible  to  give  each  child  in  a  community. 

Twenty  years  ago,  in  the  majority  of  industries,  the 
plants  were  about  as  general  in  the  scoj^e  of  their  work  as 
were  educational  institutions.  The  history  of  a  number  of 
large  concerns  that  have  been  in  existence  for  over  thirty 
years  might  be  cited  to  show  the  great  changes  that  have 
taken  place  in  the  character  of  their  activities.  Formerly, 
machine  shops  did  every  grade  of  work  on  the  floors  of  a 
single  building.  One  shop  in  an  eastern  city  built  j)rinting 
presses,  blowing  engines,  water  turbines,  marine  engines, 
mill  engines,  mining  machineiy,  pimips;  in  fact,  everything 
conceivable  in  the  machinery  line  for  which  they  could  ob- 
tain an  order. 

Textile  establishments  in  days  gone  oj  manufactured  a 
great  variety  of  fabrics.  One  concern  made  ingrain  carpets, 
Brussels  carpets,  velvets,  suiting  material,  and  many  other 
types  of  fabrics.  Knitting  mills  commonly  made  all  kinds 
of  stockings,  underweax,  and  other  knitted  goods.     Paper 


BUSINESS  SPECIALIZATION  73 

mills  of  the  past  turned  out  all  grades  of  pulp  materials, 
from  the  coarsest  straw  board  to  the  finest  writing  and  draw- 
ing papers.  Shoe  factories  never  thought  of  restricting  them- 
selves to  any  particular  grade  or  kind  of  footwear. 

At  the  present  time  such  diversity  of  activities  would  be 
undreamed  of  for  anyone  plant.  Machine  shops  now  confine 
their  energies  to  the  building  of  one  or  two  classes  of  ma- 
chinery. If  a  company  is  engaged  in  several  lines  of  activ- 
ity, it  has  a  special  shop  or  department  for  building  each 
commodity.  One  concern  builds  nothing  but  cranes,  another 
only  milling  machines,  some  plants  construct  planers  and 
shapers,  others  locomotives.  In  the  field  of  electrical  equip- 
ment, plants  may  limit  themselves  to  special  sizes  of  certain 
goods.  One  concern  now  doing  a  profitable  business  confines 
itself  to  the  building  of  motors  of  a  few  small  sizes,  and  will 
not  accept  orders  for  larger  ones. 

In  textiles,  no  thoroughly  trained  manager  would  risk 
funds  in  attempting  to  manufacture  a  great  variety  of  goods 
under  one  roof.  There  are  mills  which  confine  their  energies 
to  the  making  of  ingrain  carpets,  others  make  only  rugs. 
One  firm  has  invested  over  $1,000,000  in  equipping  an  im- 
mense building  whose  only  output  is  lace  curtains.  The 
knitting  mill  has  been  succeeded  by  the  stocking  and  under- 
wear factories.  Some  plants  have  even  gone  so  far  as  to  make 
a  specialty  of  either  men's,  women's,  or  children's  hosiery, 
and  a  few  concerns  have  gone  to  the  extreme  limit  of  special- 
ization by  making  only  one  or  two  grades  of  men's  socks. 

Shoe  manufacturing  is  known  everywhere  as  a  special- 
ized business.  At  present,  the  greatest  factories  make  either 
men's  or  women's  and  children's  shoes,  and  not  a  very  great 
number  of  grades  at  that.  Several  concerns  confine  their 
energies  to  the  production  of  one  or  two  qualities  of  foot- 
wear, and  endeavor  to  secure  an  immense  market  for  their 
output  by  giving  the  consumer  the  choice  of  a  great  number 
of  different  styles.     By  specializing  their  outputs,  factories 


74    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

can  give  such  excellent  quality  and  style  for  so  low  a  price 
that  once  established,  rivals  will  find  it  difficult  to  break  into 
their  domains. 

Like  tendencies  are  evidenced  in  the  paper  business.  No 
longer  do  single  plants  manufacture  a  great  variety  of  pulp 
material.  Mills  are  now  very  apt  to  specialize  on  newspaper, 
bond  paper,  wrapping  stock,  or  some  particular  kind  of  fiber 
goods. 

In  an  almost  indefinite  number  of  industries  the  same 
change  has  taken  place.  The  tendency  is  not  confined  to 
any  selected  group  of  activity.  It  is  the  exjDression  of  an 
ideal  which  is  influencing  our  modern  civilization.  If  we 
are  to  exist,  we  must  conserve  our  forces.  We  set  aside  great 
tracts  of  land  for  forest  reserves,  the  government  is  appoint- 
ing commissions  to  draw  up  plans  to  husband  our  coal,  vast 
sums  of  money  are  being  spent  to  make  the  barren  deserts 
fruitful  fields.  The  states  and  the  United  States  support 
great  agricultural  colleges  and  numerous  experimental  sta- 
tions for  the  purpose  of  finding  out  for  the  farmer  how  he 
can  save  his  land  for  future  generations  and  yet  get  from  it 
the  maximum  yield. 

In  manufacturing,  the  entrepreneur  has  long  seen  that  his 
rewards  depend  upon  methods  of  effectively  handling  raw 
materials  and  labor,  and  he  has  hit  upon  specialization  to 
attain  economy  in  manufacture.  Specialization  aids  in  a 
number  of  ways : 

1.  It  reduces  the  preliminary  costs  incurred  in  all  manu- 
facturing. 

2.  It  makes  possible  the  extensive  use  of  highly  special- 
ized machinery,  buildings,  and  other  equipment. 

8.  It  simplifies  managerial  problems. 

4.  It  makes  worth  while  the  introduction  of  numerous 
email  savings. 

Specialization  is  one  of  the  greatest  possible  aids  to  in- 
dustrial economy.     How  this  is  accomplished,  is  well  illus- 


f  BUSINESS  SPECIALIZATION  75 

trated  in  the  building  of  a  steam  engine.  In  order  to  build  a 
steam  engine  of  several  hundred  horsepower  in  an  unspecial- 
ized  plant,  the  builders  must  proceed  as  follows : 

The  prospective  purchasers  of  the  engine  advertise  for 
bids  on  engines  of  the  capacity  desired,  and  they  give  the 
necessary  data  as  to  the  work  that  the  engine  is  expected  to 
do.  The  concern  desiring  to  secure  the  contract  makes  out 
drawings  and  sketches  showing  the  type  of  engine  they  offer 
and  the  way  it  will  look  when  comj^leted.  On  these  sketches 
the  advantageous  features  of  their  engines  are  shown,  and 
these  sketches  are  frequently  painted  in  water  colors.  They 
always  represent  considerable  work  on  the  part  of  the  draft- 
ing department. 

If  the  firm  secures  the  contract,  the  chief  engineer  makes 
out  the  general  specifications,  such  as  the  sizes  of  the  cylin- 
ders, the  length  of  stroke,  steam  pressure,  tyj)e  of  valve  gear- 
ing, and  other  main  requirements. 

The  chief  draftsman  then  takes  the  job  in  hand  and  allots 
the  working  out  of  the  various  details  to  under-draftsmen. 
These  under-draftsmen  calculate  the  amount  of  material  that 
must  go  into  the  engine,  figure  out  the  sizes  of  the  various 
parts,  and  show  clearly  the  proper  allowances  to  obtain  the 
proper  valve  movements.  They  must  see  that  all  moving 
joints  are  properly  provided  with  lubricating  devices,  so  that 
there  wiU  be  no  binding  at  any  point,'  yet  the  movements 
must  not  be  so  free  that  leakage  of  steam  can  occur  in  any 
place.  The  throttle-valves  and  other  parts  likely  to  be  fre- 
quently used  must  be  put  in  accessible  places.  Provision  for 
taking  indicator  cards  must  be  made,  so  that  it  will  not  be 
dangerous  for  one  to  make  tests  of  the  engine  while  it  is  run- 
ning. Proper  clearance  must  be  provided  for  all  moving 
parte.  The  oiling  system  should  be  such  that  lubrication 
can  take  place  without  undue  waste  of  oil,  and  without 
involving  danger  to  the  attendant.  Not  only  must  all  of 
those  parts  be  looked  ^i\^x  i^X  the  engine,  so  that  it  can  run 


76      THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

successfully,  but  care  must  also  be  taken  to  see  that  its  parts 
are  constructed  in  such  a  manner  that  the  engine  can  be  put 
together.  The  writer  remembers  an  instance  where  several 
bolts  were  so  placed  that  it  was  impossible  to  get  a  wrench 
on  the  nuts.  As  a  consequence,  the  bolts  were  useless,  but 
it  fortunately  happened  that  if  left-handed. threads  were  cut 
on  the  bolts  the  nuts  could  be  tightened,  and  it  was  not 
necessary  to  redesign  the  whole  part  after  the  castings  had 
reached  the  machine  shop. 

When  the  drawings  of  all  the  details  are  made  and  a  gen- 
eral drawing  showing  the  placing  of  all  the  different  elements 
is  completed,  tracings  must  be  made  of  everything.  These 
tracings  are  inked  in  with  great  care,  the  different  parts 
shaded  and  the  dimensions  of  every  piece  indicated.  After 
the  tracings  are  all  completed,  every  part  must  be  carefully 
gone  over  and  checked  by  some  responsible  person.  This 
person  is  much  like  a  proofreader.  He  looks  out  for  every 
kind  of  a  mistake  that  can  occur,  or  is  likely  to  happen,  in 
the  construction  of  the  engine;  and  if  he  finds  any  inaccu- 
racy, he  must  report  it  and  see  that  it  is  corrected  before  the 
plans  leave  the  drawing-room. 

After  the  tracing  is  checked  and  everything  is  seen  to  be 
correct,  the  tracings  are  turned  over  to  the  blue-printer,  and 
a  number  of  blue  print  coj)ie8  of  every  drawing  in  the  engine 
are  made.  The  blue  prints  are  then  turned  over  to  the  con- 
struction departments. 

The  first  step  in  building  the  engine  begins  in  the  pattern 
shoj).  The  pattern  shop  is  the  place  where  the  vs^'-ious  shapes 
of  the  proposed  castings  are  made  in  wood  which  will  serve 
the  molders  as  the  basis  for  the  construction  of  the  molds. 
The  drawings  in  the  pattern  shop  are  first  carefully  gone  over 
by  the  foreman  who  determines  which  parts  are  to  be  made  by 
the  various  workmen.  The  workmen  are  then  given  the  draw- 
ings and  are  expected  to  read  them  and  make  from  them  the 
correct  form  in  wood.     To  do  this  is  no  simple  matter.     A 


BUSINESS  SPECIALIZATION  77 

good  pattern-maker  possesses,  a  very  high  degree  of  intelli- 
gence. The  drawings,  in  the  first  place,  are  often  very  com- 
plicated, and  it  requires  considerable  imagination  to  see  in 
those  conventional  lines  the  picture  of  a  form.  The  work- 
men's ingenuity  is  further  tested  by  the  fact  that  he  must 
always  remember  that  the  wooden  pattern  must  be  repro- 
duced in  metal.  The  metal  that  is  poured  into  the  molds 
made  by  the  patterns  is  in  a  molten  condition.  The  pattern- 
maker must  take  into  consideration  that  his  pattern  must  be 
so  built  that  after  the  sand  is  rammed  tightly  around  it,  it 
can  be  withdrawn  without  spoiling  the  mold.  He  must  not 
forget  to  make  the  pattern  large  enough  to  give  the  casting 
sufficient  material  to  permit  of  cutting  and  trimming  in  the 
machine  shop.  In  the  cooling  there  is  considerable  shrink- 
age of  metal,  and  unless  great  care  is  exercised  in  making 
the  patterns,  cracks  will  develop  in  the  castings.  In  the 
foundry,  the  molds  must  be  built  to  suit  the  patterns  in  ques- 
tion. Some  of  the  minor  molds  may  be  made  in  casting  ma- 
chines, but  it  is  hardly  worth  while  to  get  machinery  of  that 
kind  unless  a  great  number  of  pieces  are  made. 

After  the  castings  have  been  made,  they  are  cleaned  and 
passed  on  to  the  machine  shop.  The  machine  shop  foreman 
will  have  in  his  office  the  complete  set  of  prints  of  the  engine. 
He  will  have  the  task  of  determining  the  order  in  which  the 
various  parts  shall  be  finished.  He  will  ascertain  the  ma- 
chines best  fitted  to  carry  on  the  various  machining  processes 
on  the  different  castings.  In  these  machining  steps,  consid- 
erable time  is  lost  in  getting  the  pieces  set  up  on  the  tools 
which  are  to  make  the  engine  parts  ready  for  assembling. 
Every  time  each  piece  passes  to  a  different  tool  or  to  a  differ- 
ent step  in  the  process,  the  various  workmen  in  charge  of  the 
steps  must  decide  upon  the  best  way  to  handle  the  piece,  the 
proper  cuts  to  make  on  it,  and,  in  general,  its  method  of 
treatment. 

Several  years  ago  there  were  shops  where  fuUy  30  per  ceufc 


78    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

of  the  time  consumed  in  machining  and  assembliiig  the 
parts  was  used  up  in  preliminary  operations.  It  is  true  that 
some  of  this  time  was  wasted,  but  nevertheless,  the  greater 
part  of  the  loss  was  due  to  the  fact  that  the  firms  were  work- 
ing on  new  contracts  most  of  the  time,  and  could  use  little  of 
the  former  work  and  material. 

Imagine  the  same  engine  going  through  an  establishment 
which  has  been  sx^ecially  constructed  for  the  purpose  of  build- 
ing engines  of  that  class  and  horsepower.  In  the  first  place, 
the  engineering  and  drawing  expenses  are  reduced  to  an 
almost  insignificant  item  for  each  order,  because  one  set  of 
drawings  with  a  few  alterations  does  for  a  number  of  engines. 
The  pattern  cost  for  each  becomes  an  almost  negligible  item 
for  the  same  reason.  In  the  foundry  it  is  worth  while  to 
construct  special  molding  devices,  which  make  the  molding 
cost  for  each  engine  much  smaller  than  it  possibly  can  be 
when  only  one  or  two  engines  are  constructed.  In  the  ma- 
chine shop,  the  foreman  can  work  out  a  general  scheme  for 
the  machining  of  the  parts,  and  they  pass  from  one  tool  to 
another  without  the  necessity  of  any  special  direction.  More- 
over, tools  can  be  adapted  to  the  special  purpose  of  handling 
the  engine  j)arts.  In  the  locomotive  business,  boring  mills 
are  built  for  the  one  purj)ose  of  handling  locomotive  driving 
wheels.  Special  planers  are  designed  to  use  in  making  the 
frames  of  the  locomotives.  In  fact,  every  part  of  the  engine 
is  made  on  a  specially  designed  machine.  Jigs  and  other 
auxiliary  devices  are  built  which  reduce  the  work  of  finish- 
ing the  parts  to  a  mere  mechanical  routine,  and  to  a  very 
great  extent  eliminate  the  possibility  of  error. 

In  erecting  the  engines,  economies  can  be  introduced  by 
training  men  to  do  certain  parts  and  keeping  them  at  a  few 
tasks. 

When  things  are  done  on  a  large  scale,  specialized  plants 
can  be  erected  for  the  sole  purpose  of  making  one  product. 
Every  little  feature  in  the  process  can  be  stiidied  minutely^ 


BUSINESS   SPECIALIZATION  79 

and  economies  wliich  ■would  be'  insignificant  on  one  or  two 
become  very  valuable  savings  on  one  hundred  or  more. 

One  of  the  greatest  money-saving  devices  known  tc  the 
modern  manager  is  the  interchangeable  part.  The  inter- 
changeable part  is  the  device  that  makes  possible  the  spe- 
cialized plant,  and  the  savings  that  have  been  noted  above. 
With  it,  management  becomes  a  question  not  of  detemiining 
the  best  method  of  handling  each  new  contract,  but  the  best 
method  of  doing  each  little  detail.  The  introduction  of  the 
interchangeable  part  has  made  it  possible  for  American  man- 
ufacturers to  sell  locomotives  in  Europe  and  far-off  China. 
It  is  the  reason  why  thousands  of  people  within  our  own 
borders  carry  the  dollar  watch. 

Specialization  has,  nevertheless,  its  limitations.  A  man- 
ufacturer will  do  well  to  investigate  carefully  the  extent  to 
which  he  confines  his  energies  to  the  turning  out  of  a  single 
article.  One  can  invest  a  large  amount  of  capital  in  a  plant 
which  will  reduce  the  output  cost  many  per  cent,  but  if  the 
plant  is  specialized  to  such  a  degree  that  it  can  manufacture 
only  one  product,  the  investor  may  lose  every  cent  he  puts  into 
the  concern  by  the  introduction  of  a  new  commodity  that 
may  capture  his  market.  Thousands  of  dollars  were  lost  by 
•bicycle  manufacturers  when  the  bicycle  craze  died  down. 

A  good  rule  to  follow  in  plant  specialization  is  to  special- 
ize to  the  limit  in  plants  which  manufacture  necessaries,  or 
partly  finished  products  whose  demand  is  not  affected  by  any 
great  improvements,  things  like  flour,  sugar,  steel  rails,  steel 
j)lates,  and  articles  of  a  similar  nature.  In  goods  liable  to 
be  imj)roved  and  changed,  the  specialization  of  the  equipment 
may  be  carried  with  safety  to  the  point  where  an  improve- 
ment or  change  in  the  product  will  not  render  useless  the 
appliances  of  the  establishment.  One  may,  for  example, 
safely  specialize  a  loom  to  the  point  where  it  will  make  goods 
of  a  certain  width  and  quality,  but  it  would  not  be  safe  for 
the  managers  to  install  equipment  which  could  turn  out  only 


pyU    80  THE  PRINCIPLES  OF  INDUSTRUL  MANAGEMENT 

cloth  of  a  single  pattern  or  coloring.  It  would  even  be  safer 
for  the  loom  to  have  some  range  of  variation  in  width  and 
quality. 

If  a  product  is  of  an  ephemeral  nature,  specialization 
should  not  be  carried  past  the  point  where  the  old  machinery- 
can  be  adapted  to  the  manufacture  of  new  things.  Toy  fac- 
tories are  never  safe  in  investing  large  sums  of  money  in 
machinery  so  specialized  that  it  can  turn  out  only  one  kind 
of  toy. 

In  a  word,  there  is  a  limit  to  specialization,  and  the 
nature  of  the  goods  should  determine  the  danger  point  for 
the  manufacturer. 


u 


PART  TWO 
THE    EQUIPMENT    OF    THE    PLANT 


CHAPTER  Vn 
CONTINUOUS  INDUSTRIES.    SYNTHETICAL 

After  the  questions  of  location,  integration,  and  special- 
ization have  been  settled  for  any  particular  business,  there 
arise  the  more  technical  problems  affecting  the  successful 
activity  of  the  concern.  How  shall  we  build  the  plant  so 
that  it  will  make  integration  and  specialization  possible? 
Can  the  plant  be  run  in  any  kind  of  a  building?  The  answer 
is  emphatically,  No.  Even  if  a  business  has  been  placed 
in  its  most  suitable  environment,  it  cannot  carry  out  the 
plans  of  integration  and  specialization  unless  it  is  properly 
housed.  Neither  can  good  management  be  possible  un- 
less the  building  is  properly  adapted  to  the  work  and  the 
workers. 

Every  one  has  noticed  that  plants  for  different  industries 
vary  greatly  in  their  structures  and  layouts.  Every  industry 
can  be  carried  on  best  in  a  structure  adapted  to  its  peculiari- 
ties ;  and  viewing  industries  in  a  broad  way,  it  will  be  seen 
that  there  are  two  factors  that  play  exceedingly  important 
parts  in  determining  the  nature  of  the  structure  which  will 
house  the  plant,  viz. : 

1.  The  type  of  manufacturing  industry. 

2.  The  nature  of  the  goods  handled. 

From  the  standpoint  of  the  industry  one  may  have  two 
kinds  ot  manufacturing: 

1.  Continuous. 

2.  Assembling. 

A  continuous  industry  is  one  in  which  the  product  is  aU 
received  at  one  place  and  the  operations  to  change  the  raw 

83 


84    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

material  intxD  finished  goods  are  performed  in  a  continuous 
manner  on  the  entire  mass  of  material.  The  raw  materials 
go  into  one  end  of  the  plant  and  pass  through  various  ma- 
chines and  processes  without  halting  at  any  stage  for  other 
finished  parts  to  be  brought  to  them.  ^Vhen  such  articles 
thus  manufactured  are  finished,  they  are  completed  as  a 
whole,  and  not  in  sections  that  must  be  put  together. 
There  are  two  classes  of  continuous  industries : 

(a)  Ths  synthetical. 

(b)  The  analytical. 

In  chemistry  the  word  synthesis  is  used  to  designate  the 
process  of  making  substances  by  bringing  together  various 
ingredients.  In  our  food  and  clothes  we  consume  things 
which  have  gone  through  synthetical  processes.  A  bowl  of 
soup  and  a  piece  of  bread  are  results  of  synthesis,  as  are  also 
stockings  and  steel  rails. 

A  subdivision  of  the  synthetical  class  of  industries  may 
indicate  whether  the  industry  produces  incidental  by-products 
or  not.  A  very  important  influence  is  exercised  on  the  lay- 
out of  plants  if  it  must  handle  by-products  in  the  course  of 
its  manufacturing.  The  non-by-product  industries  are  an 
exceedingly  important  group  in  the  United  States.  In  1905, 
the  textiles  alone  contributed  nearly  $2,150,000,000  to  the 
wealth  of  the  country.  In  addition,  the  tobacco,  clay,  paper, 
and  printing  and  other  industries,  all  non-by-product  in 
type,  added  another  $2,000,000,000  to  this  sum.  In  brief, 
more  than  one-quarter  of  our  consumable  wealth  was  made 
up  of  products  coming  from  factories  of  this  nature.^ 

Since  the  textile  industries  are  the  most  important  class 
of  this  non-by-product  group,  their  plants  are  instructive. 
Into  such  plants  are  brought  raw  materials  that  are  worked 
upon  during  the  entire  time  of  manufacturing. 


^  Cf .  Census  Bulletin,  No.  57,  Census  of  Manufactures,  1905, 
p.  25. 


CONTINUOUS  INDUSTRIES,   SYNTHETICAL         85 

Any  single  textile  industry  may  be  regarded  as  a  unit 
industry  in  the  sense  that  the  entire  plant  is  devoted  to  the 
production  of  one  thing  only — the  working  up  of  certain 
fibers.  This  does  not  mean,  however,  that  there  is  no  wast- 
ing of  the  raw  materials  as  they  go  through  the  various  man- 
ufacturing steps.  In  every  textile  plant  the  cleaning  and 
handling  of  the  material  causes  some  loss  in  every  machine. 
In  cotton  manufacturing,  the  subject  of  the  utilization  of 
cotton-mill  waste  is  becoming  one  of  increasing  importance.  ^ 

Figure  7  shows  the  steps  through  which  cotton  passes 
to  be  made  into  its  different  finished  products.  While  the 
material  is  passing  through  the  various  machines,  waste 
occurs  in  dropping  from  the  opener  and  scutch  machines, 
the  brush-strips  from  the  cylinders  and  doffer  cards,  the 
card-room  sweepings,  and  comber  waste;  the  bobbin  waste, 
from  fly  frames  and  spinning  machines,  the  hard  ends 
from  cop  bobbins ;  and  there  is  also  the  oily  waste.  The 
quantity  wasted  varies  with  the  conditions  and  the  character 
of  the  raw  cotton,  the  effectiveness  of  the  machinery,  the 
ability  of  the  operator,  and  the  character  of  the  products 
manufactured.  The  aggregate  average  of  this  loss  amounts 
to  about  8  per  cent  of  the  raw  cotton  worked.  It  has  been 
estimated  that  for  the  entire  United  States  the  miU  waste 
would  total  to  the  figures  of  175,000,000  pounds,  about 
87,500  short  tons.^ 

These  figures  are  impressive.  To  rework  all  this  waste  in 
the  United  States  would  keep  1,000,000  spindles  employed 
52  weeks  in  a  year.^  Great  as  it  is  in  the  aggregate,  how- 
ever, few  mills  find  it  profitable  to  rework  their  waste  ma- 
terial, the  reason  being  that  the  waste  of  each  machine  is 
different,  and  requires  unlike  treatment,  if  not  different  ma- 
chinery, to  make  it  a  salable  product.    Waste  spinning  is  an 


'  Census  Bulletin,  No.  97,  p.  35* 
Hbid,  8  Ibid. 


86    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

industry  by  itself,  and  requires  as  much  skill  in  all  of  its 
branches  as  does  the  manufacturing  of  a  higher  grade  of 
goods.     As  a  consequence,  the  textile  manufacturer  finds  it 


IL-^v]|L_  „.        _^ 

ItrdU                   r- 

1: 

AlA 

-c — 1  ..o^.  hH    w—    ■*-    .^^    -H  "'-  h^ 

« .'.' 

— : : i — 1 «     1               II               1     > ■ 

_   .,...„..   _*_    ._    ^    ».„    J 

,..»,^.™o-. 

/      \ ,.._^...^^^<^.,......^..„  ___    :      ■          ■) 

-    — 

--       ~,  J 

From  Census  Bulletin  No.  90,  p.  27. 

Fig.  7. — Diagram  of  Cotton  Manufacture. 

more  profitable  to  sell  his  waste  product  for  what  it  will 
bring,  and  to  confine  himself  to  the  production  of  one  com- 
modity or  claas  of  products. 


CONTINUOUS  INDUSIHIES,    SYNTHETICAL  87 

In  order  to  understand  the  requirements  of  an  ideal  tex- 
tile plant  it  is  necessary  first  of  all  to  know  the  steps  in  the 
manufacturing  process.  The  working  up  of  cotton  offers  an 
excellent  illustration  of  a  textile  industry.  The  diagram 
(Fig.  7)  on  page  86  shows  the  steps  in  the  manufacture  of 
cotton  goods  from  the  bound  bale  to  the  cloth.  ^ 

The  machines  carry  the  fiber  through  twelve  main  steps. 

1.  Loosening  Out  the  Fibers  So  That  They  May  Be 
Cleaned. — This  is  done  by  the  bale-opener  or  bale-breaker 
and  the  mixing  machines.  The  cotton,  in  order  to  be  made 
suitable  for  transportation,  has  been  tightly  compressed,  and 
as  a  consequence,  it  is  very  closely  matted  and  quite  lumpy 
when  it  comes  out  of  the  bale.  In  order  to  make  it  fit  to 
enter  the  cleaning  and  carding  machines,  it  is  put  through 
the  mixers  and  openers  where  the  lumps  are  teased  out  and 
the  cotton  itself  is  made  into  the  form  of  a  broad,  loose  sheet 
of  indefinite  length,  which  can  readily  enter  the  machine 
used  in  the  next  step. 

2.  Cleaning. — The  cleaning  of  the  fiber  is  usually  done 
by  air  blast  in  scutchers,  but  the  fiber  is  as  yet  in  a  rather 
crisscross,  loosely  matted  condition,  and  in  that  state  is  un- 
Buited  to  the  making  of  thread.  In  order  to  fit  it  for  tha 
threads,  the  fibers  must  go  through  the  next  process. 

3.  Paralleling  the  Fibers. — The  main  work  of  paralleling 
is  done  in  the  carding  and  drawing  machines.  Some  clean- 
ing, of  course,  goes  on  in  the  carding  machine,  but  it  starts 
the  step  of  paralleling  the  fibers,  which  is  continued  by  the 
drawing  frame.  After  the  fibers  are  made  parallel,  they 
come  off  the  drawing  machine  in  the  form  of  a  very  loose 
sliver,  which  could  hardly  be  used  for  spinning,  so  it  must 
pass  on  for  some  further  operations. 

4.  Attenuating  the  Slivers  or  Strands. — The  strands  are 
attenuated  on  the  various  slubbing  frames  or  roving  devices. 
»  II    ^ 

^  Ceiisus  Bulletin^  No.  90,  p.  27. 


88    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

It  is  in  these  stages  of  the  process  that  there  arises  a  differ  ■ 
ence  in  the  work  put  upon  the  different  grades  of  product. 
Very  fine  goods  go  through  a  very  great  number  of  machines, 
while  the  coarser  grades  pass  through  but  one  or  two.  ^V^len 
the  strands  have  been  attenuated  and  slightly  twisted  in  or- 
der to  prevent  matting,  before  they  are  spun,  they  pass  on  to 
the  fifth  step. 

5.  Spinning. — Spinning  is  the  process  of  making  the 
loose  strand  into  a  compactly  spun  thread,  and  is  done  by 
twisting  the  strands  a  great  niunber  of  times.  There  are  two 
kinds  of  spinning  machines,  the  mule  spiimer  and  the  ring 
spinner.  The  former  attenuates  while  it  is  spinning,  and  is 
used  on  high-grade  products.  The  ring  spinner  is  used  on 
inferior  grades  of  yarns,  and  does  not  attenuate  so  evenly  as 
does  the  mule. 

6.  DouUing  and  Winding. — From  the  spinning  machines 
are  sent  forth  single  strands  of  yarn.  To  make  a  strong  and 
serviceable  thread,  two  or  more  of  these  single  strands  are 
twisted  together  on  various  twining  and  doubling  machines. 
These  machines  likewise  wind  it  on  different  kinds  of  spools, 
so  that  the  yarn  may  be  used  for  different  purposes,  as  knit- 
ting and  the  like. 

7.  Reeling. — If  the  yarn  is  to  be  dyed  or  is  to  have  any 
further  preparation  before  it  is  woven,  it  is  made  up  into 
skeins  on  the  reeling  machine ;  and  if  it  is  to  be  sent  out  to 
be  dyed,  or  is  to  be  sold  as  yam,  it  is  made  up  into  bundles 
to  facilitate  transportation. 

8.  Dyeing. — In  this  step  the  yarn  is  given  its  color. 
After  it  is  colored  and  dried  it  is  then  ready  for  the  final 
steps  of  cloth-making. 

9.  Firn  Winding. — In  this  step  the  dyed  yarn  is  wound 
in  a  form  so  that  it  can  be  put  into  a  shuttle,  which  will 
be  easy  to  use  in  the  loom  to  make  the  cross  threads  of  the 
cloth. 

10.  Warjping.—T)oLQ  preparing  of  the  longitudinal  threads 


CONTINUOUS  INDUSTRIES,   SYNTHETICAL  89 

of  the  cloth  in  such  a  manner  that  they  can  be  put  into  the 
loom. 

11.  Weaving. — The  interlacing  of  the  shuttle  or  filling 
threads  with  the  warp  threads  to  make  the  cloth. 

12.  Finishmg. — In  the  finishing  process  the  woven  cloth 
is  cleaned,  starched,  and  treated  in  various  ways  to  fit  it  for 
its  particular  market. 

The  diagram  shows  how  direct  the  process  of  manufacture 
is.  The  building,  therefore,  best  adapted  to  carrying  on  the 
cotton  industry  is  one  in  which  the  machinery  is  arranged  in 
a  direct  line  from  the  bale  breaker  to  the  finishing  room. 

There  are  two  possible  ways  of  building  a  plant  so  that 
this  end  can  be  accomplished.  It  can  be  built  over  a  great 
stretch  of  territory,  with  the  receiving  department  at  one  end 
and  the  shipping  department  at  the  other,  and  the  goods  may 
pass  in  a  generally  horizontal  line  through  the  plant.  Another 
form  of  plant  is  one  in  which  the  floor  space  is  limited  to 
within  comparatively  narrow  boiuids,  but  the  structure  is 
made  high,  so  that  the  goods  will  pass  in  a  more  or  less  ver- 
tical direction.  The  diagrams  in  Fig.  8  show  examples  of 
both  types  of  plant. 

The  textile  industry  is  one  in  which  the  labor  problem 
and  proximity  to  a  large  consuming  market  are  very  impor- 
tant. This  makes  it  desirable  to  locate  the  plant  within  the 
vicinity  of  a  large  population,  but  where  land  values  are 
bound  to  be  high.  As  a  consequence,  textile  establishments 
are  usually  built  on  the  vertical  plan  in  order  to  bring  their 
fixed  charges  in  taxes,  rentals,  etc.,  down  to  as  low  a  level  as 
their  location  permits.  On  accoimt  of  the  weight  of  the  ma- 
terial handled  and  the  comparative  lightness  of  the  machin- 
ery, there  is  no  engineering  difficulty  cormected  with  the 
building  of  the  structure,  and  no  great  expense  is  involved 
in  elevating  the  goods.  The  cost  of  handling  the  goods  is  so 
small  compared  with  the  savings  due  to  the  high  structure 
that  textile  plants  have  long  since  been  made  tall  structures. 


90    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

There  are,  however,  some  disadvantages  in  a  high  build- 
ing, especially  if  it  be  in  a  crowded  city.     It  is  very  apt  to 


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be  so.  located  as  to  have  some  difficulty  in  securing  all  the 
light  desirable  for  the  carrying  on  of  the  processes  within 


CONTINUOUS  INDUSTRIES,   SYNTHETICAL  91 

ihe  plant.  Until  the  spinning  of  the  fibers  begins,  compara- 
tively poorly  lighted  rooms  can  be  used;  but  when  the  spin- 
ning and  winding  steps  commence,  a  well-lighted  room  is  re- 
quired. In  warping  and  weaving  it  is  even  more  necessary. 
On  account  of  the  lighting  problem,  textile  plants  have  fre- 
quently been  compelled  to  vary  the  sequence  of  the  operations 
in  such  a  way  as  to  put  the  most  delicate  operations  in  the 
parts  of  the  building  where  they  can  get  the  maximum 
amount  of  light. 

The  textile  industries  afford  an  example  of  the  continuous 
industries  of  the  non-by-product  type,  and  the  characteristics 
of  the  layout  and  structure  of  those  plants  can  be  applied 
equally  well  to  industries  of  a  similar  character.  These  char- 
acteristics are,  in  brief: 

1.  The  plants  may  be  built  either  high  or  Tow,  without 
necessarily  affecting  the  continuity  of  the  process.  Hence 
they  may  be  built  in  congested  districts  without  incurring 
rental  and  taxes  unduly  high  or  other  overhead  expenses 
which  would  become  oppressive. 

2.  They  should  be  well  lighted  and  ventilated,  and  must 
use  large  window  space. 

3.  The  wash-rooms  and  lavatories  should  be  placed  in 
positions  convenient  and  yet  not  obstructive. 

The  most  important  industry  of  the  by-product  type  is 
the  iron  and  steel  group.  The  production  of  this  one  group 
amounted  in  1905  to  nearly  $2, 180, 000, 000.  ^  It  affords  from 
its  importance  and  natural  characteristics  the  best  example 
of  the  continuous  synthetic  industry  of  the  by-product  type. 
In  a  previous  chapter,  it  was  shown  how  completely  the  steel 
industry  is  integrated.  This  integration  has  been  carried  so 
far  that  nearly  every  plant  is  a  complete  unit  in  the  sense 
that  it  starts  out  with  the  raw  material  and  ends  with  the 
finished  product. 

^  Census  Bulletin,  No.  57,  p.  25, 


02    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

Three  main  ingredients  enter  into  the  production  of  steel, 
iron  ore,  coke,  and  limestone.  The  iron  ore  is  a  compound 
consisting  of  one  or  several  oxides  of  iron  mixed  with  a  con- 
siderable proportion  of  other  materials,  known  under  the  gen- 
eral name  of  gangue.  The  coke  has  the  quality  of  extracting 
the  oxygen  contents  from  the  ore,  and  leaving  behind  the 
iron  in  a  metallic  state,  but  intimately  mixed  with  the  molten 
gangue.  Limestone  has  the  quality  of  dissolving  this  non- 
metallic  content,  and  separating  it  from  the  molten  metal. 
It  sometimes  happens  that  the  iron  ore  will  have  a  greater  or 
less  percentage  of  sulphur  or  phosphorus  associated  with  it 
in  some  form  or  other.  If  it  contains  the  former,  the  ore 
must  be  treated  to  a  roasting  process,  to  burn  out  the  delete- 
rious content  before  it  can  be  fit  for  the  blast  furnace.  Phos- 
phoric iron  receives  its  treatment  farther  along  in  the  steel 
furnace  itself.  The  diagram  on  page  93  gives  some  idea  of  the 
steps  in  the  preparation  of  iron  and  steel  products  (Fig.  9) . 

A  few  years  ago  nearly  all  coke  was  prepared  in  the  vicin- 
ity of  the  coal  mines,  in  bee-hive  ovens,  which  did  not  yield 
any  by-products.  This  was  following  out  the  well-known 
principle  that  all  unnecessary  ingredients  of  the  raw  material 
should  be  removed  at  the  source  of  supply  in  order  to  save 
freight  rates.  Within  the  past  few  years,  however,  it  has 
been  found  that  the  products  so  carelessly  lost  by  the  bee-hive 
oven  are  by  no  means  worthless. 

Probably  people  were  thoughtless  of  the  by-products  in 
coal  because  of  the  location  of  the  iron  and  steel  industries. 
Pittsburg  was  in  the  center  of  the  richest  natural  gas  region 
in  the  world.  Heat  and  power  were  given  with  such  a  free 
hand  by  nature  that  the  iron  masters  could  not  afford  to  trou- 
ble themselves  about  saving  the  riches  in  coal.  Since  the 
opening  of  the  Pittsburg  district,  great  changes  have  taken 
place  in  the  steel  industry.  It  has  moved  away  from  the  re- 
gions of  natural  gas,  and  the  gas  itself  has  largely  given  out. 
Heat  can  no  longer  be  had  for  the  mere  tapping  of  the  ground. 


94    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

but  must  be  secured  by  a  more  costly  method.  Human  in- 
genuity has  been  equal  to  the  occasion ;  the  bright  luminous 
flame  that  burst  from  the  top  of  the  old  bee-hive  oven  waa  a 
beacon  inviting  the  scientist  to  explore  an  unknown  world  of 
wealth.  The  gases  which  served  to  make  useless  flames  are 
now  carefully  husbanded  and  burnt  where  they  will  create 
wealth  for  the  owners.  Coke  is  now  made  on  the  grounds  of 
the  steel  plant  and  in  by-product  ovens. 

Chemistry  has  revealed  the  fact  that  coal  can  be  made  to 
produce  three  valuable  by-products  aside  from  coke,  namely, 
gas,  anmaonia,  and  tar.  The  latest  type  of  the  by-product 
coke  oven  saves  all  three  of  those  products.  The  gas  is  col- 
lected and  purified  and  sent  to  the  various  parts  of  the  plant 
for  heating  and  power  purposes.  The  tar  is  merely  collected 
and  sold.  In  America  the  greater  percentage  of  the  tar  is 
purchased  by  people  who  have  been  instrumental  in  installing 
the  by-product  ovens,  and  is  worked  up  by  them  into  various 
substances,  as,  for  example,  aniline,  creosote,  and  pitch,  each 
one  of  those  products  being  a  representative  of  the  three  main 
divisions,  into  which  the  tar  can  be  broken,  viz. :  light  oils, 
heavy  oils,  and  pitch.  The  ammonia  which  is  driven  off 
from  the  coal  appears  largely  in  the  form  of  a  sulphate  and, 
after  being  purified,  is  largely  used  as  a  fertilizer.  As  a 
result  apparatus  to  purify  the  gas,  collect  the  tar,  and  treat 
the  ammonia  is  connected  with  the  coking  department  of 
the  steel  plant. 

Limestone  does  not  require  any  preliminary  treatment 
aside  from  being  broken  and  screened  into  suitable  size  for 
the  furnace.  It  is,  however,  the  basis  of  the  slag,  which 
comes  from  the  blast  furnace  and  which  yields  some  further 
by-products. 

The  manufacturing  of  steel  goods  from  the  raw  materials 
is  a  continuous  process ;  but  a  steel  plant,  unlike  a  textile 
establishment,  is  not  handling  light  goods.  The  units  han- 
dled weigh  tons  instead  of  pounds.    The  raw  material  haa  to 


CONTINUOUS  INDUSTRIES,   SYNTHETICAL  95 

be  accumulated  in  great  masses  in  order  to  keep  sufficient 
stock  for  all  seasons  of  the  year.  Daring  the  winter  months, 
owing  to  the  freezing  of  the  lakes,  ore  transportation  is  largely- 
suspended.  Moreover,  the  forming  processes  of  steel  require 
many  passages  through  fiery  furnaces,  making  it  impossible 
to  use  anything  but  the  most  stable  and  heat-resisting  build- 
ing material. 

The  first  requisite  demanded  by  the  nature  of  the  material 
and  the  character  of  the  process  is  sufficient  ground  space  to 
make  provision  for  heavy  foundations  and  ample  room  for 
machinery,  furnaces,  soaking  pits,  and  all  the  subsidiary 
plants  that  are  necessary  parts  of  a  plant. 

The  new  plant  of  the  United  States  Steel  Corporation  at 
Gary,  Indiana,  shows  what  present  requirements  are.  The 
dimensions  indicated  on  the  map  (Fig.  10)  give  one  some 
idea  of  the  gigantic  proportions  of  its  grounds.  The  engi- 
neers of  this  plant  introduced  every  possible  improvement 
that  experience  has  demonstrated  profitable.  The  ore  is 
brought  in  by  lake  vessels  and  unloaded  by  machinery  to  the 
great  stock  piles  and  the  charging  bins.  Eailroad  connec- 
tions enable  the  coke  and  limestone  to  be  unloaded  from  the 
cars  into  the  respective  receptacles  without  any  unnecessary 
handling. 

The  blast  furnaces  are  the  apparatus  which  manufactures 
the  iron  ore  into  pig-iron.  They  are  charged  from  the  top 
by  means  of  skip  hoists,  the  buckets  of  which  are  filled  by 
means  of  gravity  with  ore,  limestone,  and  coke,  from  the 
bins  above  mentioned. 

The  blast  furnace  derives  its  name  from  the  fact  that  it 
receives  its  air  for  fuel  combustion  under  heavy  pressure  from  - 
powerful  engines.  This  air  is  admitted  into  the  bottom  of 
the  furnace  at  certain  openings  called  tuyeres.  In  order  to 
make  it  more  efficient  as  an  ironmaker  the  blast  is  highly 
heated  by  being  passed  through  special  devices  called  stoves, 
which  are  frequently  as  high  aa  the  furnace  itself.    The  stoves 

a 


96    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 


are  usually  arranged  in  batteries  of  four  to  each  furnace. 
Wliile  three  of  them  are  being  heated  by  the  waste  gases  from 


Adapted  from  blue  prints  furnished  by  courtesy  of  U.  S.  Steel  Corporation. 

Fig.  10.— Plan  of  the  Steel  Plant  at  Gary,  Indiana. 

the  furnace,  the  fourth  stove  is  giving  up  its  heat  to  the 
entering  blaat. 


CONTINUOUS   INDUSTRIES,    SYNTHETICAL  97 

Three  products  come  from  the  blast  furnace: 

1.  Pig-iron,  which  goes  onward  for  its  final  treatment, 
eventually  becoming  the  steel  rail  or  some  other  finished  ma- 
terial. This  is  tapped  out  of  the  lower  part  of  the  furnace 
from  time  to  time  as  the  process  goes  on. 

2.  Gas,  which  is  given  off  from  the  top  of  the  furnace  and 
is  carried  away  by  the  downcomer.  This  gas  contains  suffi- 
cient combustible  material  in  it  to  make  it  a  very  valuable 
by-product,  and  is  now  extensively  used  in  heating  the  stoves 
of  the  furnace,  and  for  power  purposes. 

3.  Slag,  which  at  one  time  was  a  source  of  expense  to 
carry  away,  but  is  now  made  into  cement. 

The  pig-iron,  after  it  is  tapped  from  the  furnace,  is  carried 
onward  in  a  molten  state  by  great  ladles  to  large  mixing  de- 
vices, where  it  is  blended  with  the  charges  from  other  blast 
furnaces,  and  made  sufficiently  homogeneous  to  warrant  its 
being  taken  to  the  steel  furnaces.  The  steel  furnaces  may  be 
one  of  two  types — the  open-hearth  steel  furnace  which  is  now 
being  more  commonly  used  throughout  the  country  because 
of  the  superior  quality  of  the  steel  it  produces,  or  the  Besse- 
mer converter,  which  was  at  one  time  mainly  used  in  steel 
manufacture  on  account  of  the  rapidity  with  which  it  convert- 
ed pig-iron  into  steel.  In  either  case  the  location  of  the  plant, 
which  does  the  changing  of  the  pig-iron  into  steel,  should 
be  in  a  direct  industrial  line  from  the  blast  furnaces  and  mix- 
ing box,  so  that  there  will  be  no  loss  of  time  or  waste  of  heat. 

"Intra-works  transportation  plays  a  mighty  part  in  this  thrifty 
hurry.  The  switch  track,  indeed,  is  the  vital  factor  in  Gary's 
scheme.  Other  steel  plants  may  adopt  its  gas  engines,  copy  its 
enormous  open-hearth  units,  duplicate  its  surpassing  rail  mill. 
But  they  would  have  to  rebuild  from  the  bare  ground  up  to  attain 
the  economies  secured  at  Gary  by  the  arrangement  of  furnaces  and 
mills.  The  placing  of  these  was  dictated  by  the  speed  a  laboring 
locomotive  can  make  on  a  curving  switch  track. 

To  relieve  the  locomotive  and  achieve  speed,  the  ri^ht  angle 
was  abolished  in  locating  the  various  units.   Instead  of  setting  the 


08    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

blast  furnaces  parallel  or  at  right  angles  to  the  tracks  serving 
them,  they  were  placed  at  an  angle  of  22  degrees,  allowing  a  200- 
foot  radius  for  the  entering  switch.  A  train  of  40-ton  ladle  cars 
can  negotiate  that  swiftly,  easily  with  little  outlay  of  power  and 
no  danger  of  accident.  Reversing  on  the  main  track,  they  will 
rush  away  to  the  open  hearths  on  long,  easy  curves  of  800  feet 
radius.  What  goes  in  at  the  near  end  of  each  unit  goes  out  at  the 
other,  one  step  nearer  finished  product.  There  is  no  'backing  up,' 
except  of  empty  ladles  or  cars. 

From  the  casting  floor  of  the  open  hearths,  the  ingots  go  to  the 
mold-stripping  houses,  thence  to  the  soaking  pits  and  the  ordeal  of 
the  rolls.  Between  blast  furnaces  and  open  hearths  the  angle  to 
be  overcome  is  only  57  degrees ;  between  the  latter  and  the  soak- 
ing pits  about  70  degrees.  The  shortest  curve  in  the  175  miles  of 
track,  which  will  serve  the  mills,  has  a  radius  of  200  feet ;  nearly 
all  are  upwards  of  400  feet.  The  elevated  approaches  to  the  fur- 
naces and  mills  were  planned  with  the  same  canny  regard  for  speed 
where  speed  is  vital ;  elsewhere  they  are  a  compromise  between 
economy  of  space  and  of  power.  The  company's  locomotives  will 
do  the  switching — the  cost  will  depend  on  how  fast  they  can  move 
a  load,  how  little  coal  and  time  they  consume.  Continuous  gravity 
tracks  at  the  shipping  platforms  allow  the  shifting  of  loaded^cars 
without  engines. 

Analysis  of  the  work's  transportation  can  go  no  further  than  to 
say  that.it  embodies  the  most  advanced  railway  practice.  Switch 
and  service  tracks,  except  those  at  the  blast  furnaces,  are  contin- 
uous ;  blockades  are  impossible,  both  ends  being  accessible  and  the 
forward  movement  of  cars  is  uninterrupted.  The  same  principle 
obtains  in  the  'Kirk'  classification  and  storage  yards,  and  in  the 
locomotive  house,  through  which  tracks  and  pits  run  at  an  angle, 
abolishing  the  turn  table.  These  individual  savings,  multiplied 
daily  a  thousand  times,  make  tremendous  economies."  ^ 

In  the  steel  furnace,  the  molten  pig-iron  is  brought  into 
contact  with  air,  and  in  this  way  the  excess  carbon  in  the 
iron  is  removed,  to  give  the  metal  the  properties  of  mild 
steel.  When  that  stage  is  reached,  the  blast  is  turned  off  and 
the  reducing  process  ceases.  The  furnace  is  then  emptied  of 
its  steel  contents  into  a  great  ladle,  which  is  carried  over  to 

^System^  January,  1909,  pp.  10  and  11. 


CONTINUOUS   INDUSTRIES,    SYNTHETICAL  99 

the  molds.  The  molds  are  placed  on  trucks,  set  on  an  indus- 
trial railway,  and  after  the  steel  is  emptied  from  the  ladle 
into  these  molds,  it  goes  back  for  another  ladleful,  while  the 
locomotive  hauls  away  the  steel-filled  molds  whose  contents 
are  soon  to  harden  into  ingots. 

By  the  time  the  ingots  arrive  at  the  steel  plant,  they  are 
ready  to  be  taken  from  their  molds.  This  removal  is  done 
by  a  device  called  the  stripper,  which  automatically  removes 
the  casing  and  sets  it  on  another  car,  by  which  it  is  returned, 
to  be  used  in  molding  another  lot  of  metal.  The  ingots, 
highly  heated,  remain  standing  on  the  trucks  ready  to 
be  hauled  to  the  soaking  pits,  into  which  they  are  placed  in 
order  to  be  kept  hot  until  they  are  ready  for  the  rolls.  The 
waiting  period  is  not  long;  some  unseen  power  uncovers  the 
top  of  one  of  the  pits,  a  pair  of  giant  tongs  lifts  the  mass  of 
dripping  steel  from  the  flaming  cavity,  and  lightly  waltzes 
it  through  the  air  to  a  little  truck  into  which  it  is  gently 
placed.  The  truck,  as  soon  as  loaded,  automatically  carries 
the  great  ingot  on  to  the  roll  tables,  which  pass  the  mass  of 
metal  to  and  fro  between  two  sets  of  rolls,  one  pair  of  which 
is  placed  horizontally  and  the  other  vertically.  By  a  few 
passes  the  sizzling  metal  is  reduced  from  ingot  dimensions  to 
bloom  size.  From  these  rolls,  the  bloom  is  taken  automati- 
cally by  rolling  tables  and  carrying  devices  either  to  another 
soaking  pit,  where  it  is  reheated  before  entering  the  rail 
mills,  or  it  goes  directly  from  the  first  pair  of  rolls  to  the  rail 
miU. 

The  rail  mill  consists  of  three  steel  cylinders  set  horizon- 
tally one  upon  the  other.  The  bloom  is  put  between  the  two 
lower  rolls  and  is  drawn  through.  When  it  gets  through,  the 
roll  table  on  the  other  side  of  the  rapidly  revolving  shaping 
cylinders  tips  upward  and  carries  with  it  the  partly  formed 
rail,  and  then  automatically  pushes  the  latter  into  the  upper 
set  of  rolls,  which  now  draw  it  back  to  the  other  side,  and 
the  other  table  tips  up  to  receive  the  more  nearly  formed  rail. 


100    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

This  process  is  repeated  until  seven  or  more  passes  are  made, 
and  the  steel  bloom  becomes  a  great  long  steel  rail. 

After  it  makes  its  last  pass  it  is  carried  on  to  the  saws 
where  the  ends  are  trimmed  off,  and  then  the  revolving  gang 
saws,  at  a  single  sweep,  cut  several  rails,  thirty  to  thirty- 
three  feet  long  from  the  stiU  red-hot  steel  ribbon. 

After  that,  automatic  devices  carry  the  rails  to  the  cooling 
tables,  where  they  remain  until  they  attain  the  atmospheric 
temperature.  WTien  cooled  they  are  ready  to  receive  the  fish- 
plate holes.  These  are  put  in  by  drilling  machines.  Three 
or  more  individual  drills  are  groujDed  with  a  few  inches  in- 
tervening between  centers,  and  then  the  two  gangs  of  drills 
are  distanced  from  each  other  by  the  length  of  the  rail.  The 
rail  is  placed  in  position,  and  the  mere  pulling  of  a  lever 
starts  all  the  drills  in  both  gangs  simultaneously,  and  the 
holes  are  cut  in  a  few  minutes,  making  the  rail  ready  for 
shipment.  Here,  again,  the  ever-present  carrying  devices  are 
ready  to  do  their  work.  As  soon  as  the  holes  are  cut,  a  trav- 
eling chain  slides  the  rail  gently  into  a  freight  car,  which  is 
waiting  to  receive  it  to  carry  it  to  the  consumer. 


CHAPTER  VIII 

CONTINUOUS   INDUSTRIES,   ANALYTICAL 

The  preceding  chapter  considered  the  kinds  of  plants 
suitable  for  carrying  on  synthetical  processes.  This  chapter 
will  discuss  plant  structures  for  another  large  grouj)  of  con- 
tinuous industries,  which  may  be  designated  Analytical. 

An  analyst  is  one  who  separates  a  body  of  matter  into  its 
constituent  parts,  or  breaks  it  down  into  its  original  ele- 
ments. The  process  is  not  confined  to  the  treatment  of  physi- 
cal bodies.  A  judge  is  called  a  keen  analyst  when  he  takes  a 
mass  of  data  presented  by  contending  lawyers,  and  separates 
it  in  such  a  manner  as  to  reveal  the  true  significance  of  the 
evidence.  This  is  as  truly  an  analytical  process  as  is  the  fil- 
tration of  water.  The  judge  separates  the  true  from  the  false 
in  evidence,  just  as  the  filter  extracts  the  impurities  from  the 
wat^r. 

Non-by-product  and  by-product  industries  may  be  in 
either  the  analytical  group  or  in  the  synthetical  class.  The 
non-by-product  group  of  analytical  industries  in  1905  con- 
tributed more  than  $2,500,000,000  to  the  wealth  of  the 
country,  mainly  in  the  form  of  food  products  (not  including 
meat  packing),  liquors  and  beverages,  and  lumber  products.^ 
Liquors  and  beverages  are  properly  placed  in  this  group  of 
industries  because  they  are  in  the  main  extractive  industries. 

In  the  industries  discussed  in  the  preceding  chapter,  the 
materials  handled  in  the  process  of  manufacture  were  of  such 
a  nature  that  there  had  to  be  a  considerable  expenditure  of 
time  and  labor  or  power  in  conveying  the  partly  finished 

1  C^risus  Bulletin,  No.  57,  pp.  25  an4  37^ 


102    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

goods  from  one  machine  or  step  in  the  process  to  another. 
In  a  textile  establishment  trucks  and  elevators  are  very  ex- 
tensively used,  while  in  a  steel  mill  the  conveying  machinery 
is  unique  for  its  elaborateness. 

In  the  analytical  group  of  industries,  the  larger  number 
can  utilize  exceedingly  cheap  means  to  convey  materials  from 
step  to  step  in  the  manufacturing  process.  Two  conditions 
conspire  to  make  this  possible: 

1.  In  many  of  those  industries  gravity  can  be  extensively 
used  in  conveyance. 

2.  The  processes  are  of  such  a  nature  that  the  goods,  as  a 
rule,  are  handled  in  bulk  or  in  continuous,  unbroken  streams 
rather  than  in  individual  units. 

Matter  may  be  gaseous,  liquid,  or  solid.  The  handling 
of  the  solid  is  the  most  difficult  and  expensive;  but  if  the 
solids  consist  of  very  finely  divided  particles,  the  task  is  sim- 
plified. Such  goods  may,  in  fact,  be  handled  as  easily  aa 
liquids. 

Liquids  are  very  easily  handled  in  bulk.  They  can  be 
concentrated  at  a  single  point,  as  at  the  bottom  of  a  building, 
and  then,  by  means  of  pumps,  be  forced  through  pipes  to  the 
top  of  the  structure.  From  this  elevated  position  they  can 
be  passed  by  gravity  through  the  various  steps  of  the  process 
from  the  beginning  all  the  way  to  the  shipping-room. 

Sugar-refining  affords  an  excellent  illustration  of  an  in- 
dustry of  the  non-by-product  type  which  handles  solids  and 
liquids.  Raw  sugar  comes  to  the  United  States  in  large 
quantities  from  abroad.  The  large  refineries  are  usually  lo- 
cated at  some  seaport  where  it  is  possible  to  unload  the  sugar 
directly  from  the  vessel  into  the  storage  house. 

The  raw  sugar  is  carried  in  the  hold  of  the  vessels  in  bags 
of  various  descriptions,  and  is  hoisted  out  by  a  steam  wind- 
lass in  lots  of  several  hundred  pounds  at  a  time.  From 
thence  it  is  weighed  in  the  presence  of  government  inspectors 
who  determine  the  duty  charges.     After  it  is  weighed,  it  m 


CONTINUOUS  INDUSTRIES,   ANALYTICAL  103 

carried  to  the  storage  house  by  means  of  rapidly  moving 
traveling  cranes.  These  cranes  stack  the  sugar  in  immense 
piles  away  from  the  weather,  where  it  is  kept  until  ready  for 
use. 

In  order  to  refine  the  raw  sugar  it  is  dissolved  in  crude 
molasses,  which  is  then  heated  to  the  melting  point.  This 
is  usually  done  on  the  first  floor  in  close  proximity  to  the 
storage  sheds.  (See  Figs.  11  and  12.)  From  thence  it  is 
pumped  to  the  top  of  the  building  and  treated  in  the  defeca- 
tor with  some  reagents,  which  coagulate  the  various  impuri- 
ties and  neutralize  any  vegetable  acids  in  the  sugar  solution. 
When  the  coagulation  is  complete,  the  solution  is  run  to  the 
floor  below,  where  it  passes  through  coarse  canvas  bags,  which 
strain  out  foreign  substances. 

The  solution,  although  now  freed  from  the  grosser  impuri- 
ties, would  still  give  a  yield  of  rather  unappetizing  appear- 
ance if  not  further  purified  before  crystallization.  In  order 
to  remove  all  extraneous  matter  it  passes  another  story  down- 
ward through  large  bone  black  filters,  from  which  it  issues  a 
clear,  colorless  liquid,  occasionally  slightly  tinged  with  yel- 
low. After  it  has  passed  through  the  bone  black  filters  the 
solution  is  ready  for  crystallization.  The  crystallization  is 
done  on  the  next  floor  below. 

Here  are  placed  large  enclosed  vessels  connected  with  an 
exhaust  which  reduces  the  pressure  in  the  vessel  to  a  very 
low  point.  These  enclosed  vessels  are  known  as  vacuum  pans 
in  which  the  solution  is  boiled  in  order  to  crystallize  the 
sugar  from  it.  The  task  of  boiling  the  sugar  until  it  reaches 
the  proper  point  for  crystallization  is  one  that  requires  care 
and  experience  on  the  part  of  the  operator,  and  as  a  rule  he 
is  one  of  the  best  paid  men  in  the  plant. 

After  the  solution  has  been  boiled  until  it  has  reached  the 
proper  condition,  it  is  run  into  cooling  and  mixing  tanks  to 
crystallize.  These  tanks  are  situated  on  the  floor  below  the 
vacuum  pans  and  contain  a  semi-liquid  paste  of  syrup  and 


By  courtesy  of  Geo.  M.  Newhall  Engineering  Co.  Ltd.,  Phlla.,  Pa. 

Fig.  11. — Sugar  Refinery  Scheme, 


1. 

Sugar  Breaker. 

18. 

Air  Drier  Feed. 

33. 

Moist  White  Sugar. 

2. 

Elevator. 

19. 

Air  Drier. 

34. 

Sugar  Packer. 

3. 

Raw  Sugar. 

20. 

Air  Heater. 

35. 

Water  Cooler  for  Char, 

4. 

Raw  Sugar  Heater. 

21. 

Granulator. 

36. 

Char  Duster. 

5. 

Raw  Sugar  Mixer. 

22. 

Screen. 

37. 

Conveyor. 

6. 

Centrifugals. 

23. 

Powdered  Sugar  Mill. 

38. 

Hot    Water   and    Liqx 

7. 

Machined  Sugar. 

24. 

Conveyor. 

Tanks. 

8. 

Sugar  Melting  Pan. 

25. 

Barrel  Packers. 

39. 

Char. 

9. 

Blow-Up. 

26. 

Bag  Packers. 

40. 

Char  Drier. 

10. 

Defecator. 

27. 

Scales. 

41. 

Char  Kiln. 

11. 

Bag  Filter. 

28. 

Tank  for  Refined  Mo- 

42. 

Char  Cooler. 

12. 

Char  Filter. 

lasses. 

43. 

Char  Conveyor. 

13. 

Vacuum  Pan. 

29. 

Conveyor. 

44. 

Char  Elevator. 

14. 

Sugar  Wagon. 

30. 

Cube  Sugar  Machine. 

45. 

Water  Heater. 

15. 

Mixer. 

31. 

Triple  Effect  Evapora- 

46. 

Bag  Wash  Tank. 

16. 

CentrifugaL 

tor. 

47. 

Pump. 

17. 

Sugar. 

32. 

Mixer  and  Cooler. 

48. 

Raw  Sugar. 

CONTINUOUS  INDUSTRIES,  ANALYTICAL  105 

granulated  sugar.  To  make  the  complete  separation  of  the 
crystals  from  the  syrup  the  pasty  mass  is  dropped  into  cen- 
trifugal machines  located  on  another  floor  beneath.  The 
centrifugal  machines  revolve  at  a  high  speed,  and  fling  the 
liquid  material  through  their  porous  sides,  leaving  behind 
the  granulated  sugar.  At  this  point  in  the  process,  any  yel- 
lowness which  may  tinge  the  sugar  is  removed  by  the  slight 
addition  of  some  ultramarine  to  the  sugar  as  it  is  being 
whizzed  in  the  machine. 

From  ^the  centrifugal  machines  the  sugar  is  passed  to 
another  floor,  where  it  is  placed  in  large  drying  and  granu- 
lating cylinders  heated  by  hot  air.  After  it  is  dried  and 
granulated  it  is  run  into  bins,  and  from  them,  by  gravity,  into 
barrels  and  other  containers  in  which  it  is  sold  to  the  con- 
sumer.     (See  Figs.  11  and  12.) 

Gravity  is  likewise  used  in  cleaning  the  apparatus  of  the 
refinery.  The  bone  black  or  char  filters  become  clogged  with 
impurities,  so  that  it  is  necessary  to  clean  them  out  at  fre- 
quent intervals.  This  is  accomplished  in  a  very  ingenious 
manner.  The  char  contents  of  the  clogged  filter  are  dropped 
through  a  series  of  heated  cylinders,  which  first  dry  the  ma- 
terial and  then  heat  the  char  to  the  point  of  incandescence,  so 
that  the  impurities  in  the  char  become  charred  themselves, 
and  as  a  consequence  the  impurities  actually  become  the 
means  of  purifying  succeeding  lots  of  sugar.     (See  Fig.  11.) 

It  is  evident  that  a  sugar  refinery  must  be  a  very  high 
building  if  it  is  to  take  advantage  of  the  gravity  method  of 
conveyance.  This  is  usually  the  case ;  and,  inasmuch  as  there 
are  few  steps  in  the  process  which  require  a  great  amount  of 
light  and  observation  on  the  part  of  the  worker,  one  will 
usually  find  that  sugar  refineries  are  tall,  somber-looking 
buildings.  They  must  all  have  great  storage-rooms  in  order 
to  contain  the  raw  sugar  and  also  to  hold  their  finished  prod- 
ucts, because  the  goods  come  from  afar,  and  the  manu- 
facturer must  keep  oa  hand  a  great  quantity  of  goods  in 


CONTINUOUS  INDUSTRIES,   ANALYTICAL  107 

order  to  keep  his  plant  running  uniformly  throughout  the 
year. 

The  diagrams  11  and  12  show  the  layout  and  elevation  of 
one  of  the  largest  sugar  refineries  in  the  United  States.  In 
connection  with  a  great  many  refineries  there  are  very  fre- 
quently barrel  factories  and  wooden  box  factories  which  man- 
ufacture the  cases  for  the  finished  sugar. 

The  shipping  room  of  the  sugar  refinery  should  be  so 
placed  that  the  finished  sugar  will  come  into  the  department 
with  the  least  possible  trucking  cost.  The  room  should  also 
be  so  placed  that  the  goods  can  be  put  into  wagons  or  cars 
without  any  unnecessary  handling.  The  diagram  shows  how 
closely  the  refinery  has  held  to  this  ideal.  The  packing, 
storage,  and  shipping  departments  are  located  right  on  the 
corner  of  the  public  street  and  railroad,  and  goods  can  be 
put  into  the  freight  car  with  even  less  handling  than  it  takes 
to  load  the  wagons  which  distribute  the  products  to  the  local 
grocers. 

Another  well-known  industry  of  the  analytical  type  which 
handles  solids  exclusively  and  uses  the  gravity  means  of  con- 
veyance is  flour  milling.  The  rapidity  with  which  flour  is 
made  and  the  cheapness  with  which  it  is  handled  is  a  never- 
ending  source  of  interest  to  the  student  of  industrial  manage- 
ment. One  can  go  through  a  mill  that  manufactures  thou- 
sands of  barrels  a  day  and  find  some  few  dozen  men  supplying 
all  the  necessary  labor  for  the  vast  concern.  The  steps  in 
flour-making  are  as  follows : 

1.  Cleaning. — Here  the  grain  is  not  only  separated  into 
good  and  bad  lots,  but  has  all  foreign  matter  from  dust  to 
twigs  and  nails  taken  out  of  it. 

2.  Grinding. — At  this  stage  the  different  qualities  of 
flour  are  obtained  by  separating  out  of  the  grain  its  various 
envelopes  of  nutritive  matter  and  grinding  them  between 
different  series  of  rolls. 

8.  Screening  or  Bolting- — In  this  step  the  various  gradeg 


108    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

and  sizes  are  separated  after  they  have  passed  through  the 
rolls. 

4.  Purifying. — The  purifier  extracts  from  the  finely 
ground  grain  the  light  flaky  celhJose  technically  known  as 
"bees'  wing."  This  bees'  wing  has  become  so  intimately 
mixed  with  the  flour  that  it  cannot  be  taken  out  by  the 
screens.  The  work  is  done  by  means  of  a  gentle  air  blast, 
which  is  strong  enough  to  remove  the  bees'  wing  but  not  the 
flour  particles.  This  leaves  the  flour  purified  of  all  foreign 
matter. 

6.  Packing. — Here  the  flour  is  weighed  into  bags  and 
barrels  and  sealed  for  shipment. 

6.  Storage  and  Sliipinng. 

In  order  to  take  advantage  of  the  gravity  method,  convey- 
ing buckets  carry  the  grain  to  the  top  of  a  high,  almost  win- 
dowless  structure,  where  it  is  cleaned  of  its  impurities  in 
prei)aration  for  the  grinding.  Several  grinding  processes 
take  place,  and  after  each  grinding  the  grain  is  bolted.  On 
account  of  these  many  grinding  and  bolting  steps,  it  is  un- 
economical to  build  a  mill  so  high  that  gravity  will  do  all 
the  conveying  work  from  the  beginning  to  the  end  of  the  pro- 
cess. Considerable  saving  in  power  and  space  is  obtained  by 
keeping  tlie  cleaning,  gi-inding,  screening,  and  purifying  ap- 
paratus on  different  floors.  This  makes  necessary  some  re- 
conveying  of  the  partly  ground  grain  to  upper  floors,  but  the 
general  line  of  passage  is  not  broken.  One  great  stream  of 
grain  starts  from  the  top  of  the  building,  and  after  a  few 
eddying  currents  on  the  downward  flow,  finally  emerges  from 
the  last  machine  as  white  flour  ready  for  the  baker. 

The  by-product  industries  of  the  analytical  type  con- 
tribute by  the  meat  packing  and  chemical  industries,  in- 
sluding  oil  refining,  about  $2,000,000,000  annually.  ^  The 
meat-packing  industry  alone  accounts  for  $914,000,000  of  this 


*  Censtts  BuUetiUt  No.  57,  pp.  25  and  27. 


CONTINUOUS  INDUSTRIES,  ANALYTICAL  109 

amount.*  It  offers  one  of  the  best  examples  of  an  industry 
of  this  type. 

In  meat  packing,  large  units  are  handled.  It  would  be 
an  exceedingly  difficult  matter  to  handle  the  products  of  the 
packing  house  as  grain  is  handled.  The  packing  establish- 
ments have  introduced  such  remarkable  economies  into  their 
business  that  it  is  noted  the  world  over  for  its  perfection  in 
organization;  and  the  buildings  have  been  made  to  fit  the 
process  in  a  most  remarkable  way. 

The  packing  house,  as  in  all  industries,  one  of  the  im- 
portant problems,  is  the  passing  of  goods  from  department  to 
department  with  the  least  possible  outlay  of  power.  It  has 
been  seen  how  some  other  industries  solve  the  problem.  The 
manager  of  the  packing  house  does  not  handle  goods  that  can 
be  pumped  or  conveyed  by  belts  and  run  through  machines 
in  bulk,  as  is  done  in  cotton  spinning  or  flour  manufacturing. 
His  task  is  to  handle  a  delicate,  but  large  and  unwieldy  body. 
A  miscut  will  lower  the  value  of  the  product,  perhaps  enough 
to  destroy  the  profit  in  that  step  of  the  process,  and  even 
cause  an  absolute  loss  on  the  entire  carcass. 

It  has  been  said  that  in  the  packing  house  everything 
about  the  animal  is  saved  save  his  dying  groan.  A  person 
can  apxjreciate  the  full  significance  of  this  statement  when  he 
realizes  the  refinements  of  the  savings.  The  first  step  in  the 
process  of  meat  packing  is  to  drive  the  animal  to  the  top 
floor  of  the  building,  where  it  is  stunned.  The  succeeding 
steps  in  the  j)rocess  are  as  follows : 

After  the  animal  is  knocked  on  the  head  it  is  dropped 
from  the  stuiming  platform  to  the  floor.  Here  the  animal  is 
shackled  and  lifted  by  means  of  a  power  pulley  to  the  bleed- 
ing rail,  where  its  throat  is  opened  and  allowed  to  bleed  for 
six  minutes.  At  the  end  of  that  time  the  head  is  removed 
and  the  carcass  allowed  to  bleed  for  ten  minutes  more.     By 

^Censtis  BuUetint  Ko.  67|  p.  27. 


no    THK  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

this  time  it  is  ready  for  further  dissection.  Formerly  it  "was 
the  universal  practice  to  have  this  dissection  carried  on  with 
the  animal  hung  by  its  hind  feet  from  an  elevated  rail.  The 
rail  was  slightly  inclined  so  that  the  mere  weight  of  the  car- 
cass would  move  it  onward. 

With  this  arrangement  the  workman  had  to  walk  wath 
the  moving  animal  while  he  was  working  upon  it.  More* 
over,  the  animal,  being  himg  in  this  way,  was  somewhat  in- 
conveniently placed  for  some  of  the  dressing  steps.  In  order 
to  place  it  equally  conveniently  for  all  dressing  steps,  and  to 
eliminate  the  walking  on  the  part  of  the  operator,  the  Armour 
Company  has  installed  a  moving  table,  216  feet  in  length,  on 
which  the  animal  is  deftly  dropped  on  its  back  after  it  is 
beheaded.  The  workmen  stand  on  this  moving  table,  make 
their  cuts  on  the  animal,  and  then  move  back  to  the  new  ani- 
mal as  it  comes  from  the  preceding  worker.  In  this  way  while 
they  are  cutting  the  animal,  they  are  stationary  with  respect 
to  it,  yet  the  animal  is  going  on  its  onward  course. 

As  each  piece  is  taken  from  the  body  it  is  dropped  into  a 
chute  or  opening  by  which  it  is  carried  by  gravity  to  the 
place  where  it  will  receive  further  treatment.  The  carcass 
itself  moves  onward.  After  all  the  trimming  has  been  done 
on  the  tables  it  is  lifted  automatically  from  the  table  to  over- 
head traveling  hooks.  These  hooks  are  run  on  troUeys,  and 
the  track  is  inclined.  Here  the  dressing  is  continued,  and 
the  animal  is  washed,  cleaned,  split,  and  eventually  weighed. 
All  the  time  these  operations  are  going  on  it  is  gradually 
approaching  the  cooler. 

Fig.  No.  13  is  taken  from  one  of  the  large  packing  houses 
in  Chicago,  and  shows  graphically  how  well  the  firm  has 
kept  in  mind  the  adaptation  of  the  building  to  its  purposes. 
The  entrance  for  the  animal  is  so  placed  that  by  the  time  its 
carcass  is  prepared  no  unnecessary  traveling  is  required  to 
enable  it  to  have  cheap  shipment  either  for  long  distance  by 
railroad,  or  for  local  trade  by  teams. 


CONTINUOUS  INDUSTRIES,  ANALYTICAL 


111 


The  photograph  on  the  other  page  (Fig.  14)  shows  the 
tremendous  extent  of  ground  covered  by  one  of  the  large  es- 


Adrd.    STEEET. 


A 


/ 


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BLEE0JM6    BAIL. 


Cdtle  Kjoo  6 Minute* 


'o^  H«oJ 


-CZK 


BLCEDiriG     (SAIL. 


CdlK  MiM)  I 


utr*  &mfOP<s   0<*«Mirwf    d«()in«. 


Tl*»i»  Table  H«ie«  and    tnTisiili "-- 


3\ 


OeeaStMG    AMD    SPurTTIHO     eAIL. 


Hei^  The  Car^as«    t6  Fwr«iK«i 
And  Qpllt   Down   &ock  6oA«.^ 


CL£ANinG   AND   COCUING    RAIL. 


r^ 


COC 
CHIu! 


Wholesoe  Locol 


V 


©pecteR 


LINC 
EOOM. 


OPPEE     FLOORS. 
Ho<^    Shippin<), 

LowEi?   Fuooe. 

Baef  Shipplna 


Local  ShipTnenTS. 


£2/  courtesy  of  Armour  &  Co. 

Fig.  13.— Plan  of  a  Packing  House. 

tablishments  and  the  apparently  heterogeneous  arrangement 
of  storehouses,  power  houses,  laboratories,  stables,  and  other 
J9 


112    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

departments.^  The  plants  do  not  have  the  most  economical 
layouts.  The  writer,  in  speaking  to  a  number  of  the  officials 
of  the  various  concerns,  has  been  told  that  there  are  hundreds 
of  places  where  improvements  could  be  made.  Any  concern 
having  a  clear  spot  of  ground  sufficiently  large  would  rebuild 
its  plant  in  quite  a  different  way.  The  present  grouping  of 
buildings  has  resulted  from  meeting  the  needs  of  the  mo- 
ment. Idealism  had  to  be  sacrificed  to  present  exigencies. 
However,  the  arrangement  and  grouping  of  the  buildings 
with  all  of  their  defects  indicate  several  noteworthy  fea- 
tures :  ; 

1.  The  various  killing  departments  have  maintained  the 
theoretical  ideals  of  structm-e  of  buildings.  In  the  cattle, 
sheep,  and  hog-killing  establishments  the  animal  supplies  its 
own  motive  power  to  the  plant  from  the  unloading  pens,  and 

'  The  various  departments  numbered  in  Fig.  14  are  as  follows : 
1.  Lard  and  Oil  Refinery,  Butterine  and  Oleo  Oil.  2.  Tin  Shop 
Lithograph  Department.  3.  Carpenter  Shop.  4.  Visitors'  En- 
trance, Paymaster.  5.  Timekeeper,  Emergency  Hospital.  5a. 
Fire  Engine  House,  Watch  Patrol.  6.  Pepsin  Laboratory,  Diges- 
tive Ferments.  7.  Vinegar,  Pickled  Goods.  8.  Smoke  House.  9. 
Scale  Repair.  10.  Employment  Office.  11.  Storage.  12.  Print- 
ing Department,  Labels,  Stationery,  Advertising.  13.  Hog  Kill- 
ing. 14.  Canning  Department.  15.  Beef  Extract,  Mince  Meat, 
Soda  Fountain  Supplies.  16.  Sausage.  17.  Meat  Curing.  17a. 
Pork  Cutting  Floor.  18.  Butter,  Egg,  and  Poultry  Freezer.  19. 
Power  House  and  Refrigerating  Plant,  Electrical  Department, 
Machine  Shop,  Boiler  Rooms.  20.  Beef  Freezer.  21.  Cattle  Kill- 
ing, Sheep  Killing.  22.  Wholesale  Market.  23.  Ham  and  Bacon 
Department.  24.  Shipping  Department.  25.  Bone  Novelty  De- 
partment. 26,  27.  Fertilizing  Factory.  28.  Stables.  29.  Wool 
House,  Sheep  Skins,  Pelts,  etc.  A  large  number  of  the  depart- 
ments are  not  shown  on  the  picture,  for  instance :  Hide  Cellars, 
Chemical  Laboratory,  Cooper  Shop,  Paint  Shop,  Police  Station, 
Retail  Market,  Gas  Plant,  and  Box  Factory.  The  Glue,  Gelatin, 
Soap,  Curled  Hair,  Sandpaper,  Anhydrous  Ammonia,  and  Isinglass 
Departments  are  at  Thirty-first  and  Benson  Streets,  one  mile  north 
of  the  Union  Stock  Yards. 


CONTINUOUS   INDUSTRIES,   ANALYTICAL  113 

the  buildings  into  which  they  run  are  well  arranged  to 
handle  the  cattle  from  the  slaughtering  to  the  shipping. 

2.  The  various  subsidiary  plants,  as  the  canning  and 
smoked  meats  departments,  that  are  most  dependent  upon 
these  main  sections,  are  situated  in  close  proximity  to  main 
departments. 

8.  The  auxiliary  plants  which  manufacture  the  acces- 
sories necessary  to  carry  on  the  main  business  are  placed 
near  the  buildings,  which  use  their  output ;  the  can  manu- 
facturing plant  being  placed  conveniently  between  the  lard, 
butterine,  and  oleo  dejDartment  and  the  canning  department. 

4.  The  departments  which  are  not  in  such  intimate  con- 
tact with  the  more  active  business  and  yet  which  are  abso- 
lutely dependent  upon  the  main  killing  departments,  are 
placed  near  the  various  killing  departments,  but  not  in  any 
particular  rotative  order,  as,  for  example,  the  pickling  and 
storage  departments. 

5.  The  derivative  industries,  as,  for  example,  the  but- 
terine and  oleo  plants,  lard  refineries,  and  the  like  are  put 
as  near  the  killing  establishments  as  is  possible  without 
interfering  with  the  other  more  important  subsidiary  in- 
dustries. 

6.  The  derivative  industries,  as  the  fertilizer  plants, 
W'hich  create  offensive  odors,  are  placed  on  the  outlying 
boundaries  of  the  plant. 

7.  The  power  house  is  put  in  a  central  location.  The 
ideal  situation  for  the  power  house  would  be  to  place  it  as 
near  the  departments  requiring  the  most  steam,  namely,  the 
tanking  house,  bone  house,  and  oil  house,  which,  according 
to  Mr.  Wilder,  are  the  largest  consumers.^ 

A  close  inspection  of  the  photograph  will  show,  however, 
that  in  a  nimiber  of  cases  there  are  deviations  from  the  best 
practice,  as  recognized  by  modern  managers.     The  printing 

,>*'The  Modem  Packing  House."  by  F.  W.  Wilder,  p.  28. 


114    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

establishment,  for  instance,  is  backed  by  the  house  which 
manufactures  digestive  ferments.  On  its  right  side,  is  the 
beef  extracting  and  soda  fountain  supply  department,  while 
on  the  other  is  the  timekeeper's  office  and  the  emergency 
hospital.  The  various  pickling  and  storage  houses  are  scat- 
tered all  over  the  plant,  some  of  them  quite  a  distance  from 
either  railroad  siding  or  the  plants  which  give  them  their 
material.  Even  the  shipping  department  is  open  to  some 
criticism.  The  beef  and  sheep  shipping-room  is  located  at 
one  place,  the  hog  shipping  at  another,  while  the  products 
from  the  canning  and  curing  departments  must  travel  some 
distance  before  they  reach  a  shipping  platform.  (See  Nos, 
22  and  24,  Fig.  14.) 


CHAPTER  IX 
ASSEMBLING   INDUSTRIES 

Besides  those  kinds  of  manufacturing  wherein  there  is  a 
continuous  action  upon  the  entire  mass  all  the  time  the  goods 
are  being  treated,  there  is  the  Assembling  type.  An  assem- 
bling industry  is  one  wherein  the  final  product  is  made  by 
first  producing  the  various  ingredients  or  parts,  and  then  as- 
sembling them  together.  This  type  of  an  industry  requires 
a  manufacturing  department,  men  or  operators  to  make 
parts,  and-  another  set  of  producers  who  join  these  parts. 
Examples  of  these  industries  are  shoe  manufacturing,  toy 
manufacturing,  locomotive  making,  engine  building,  ship 
building,  piano  making,  and  clothing  making. 

According  to  the  Census  reports  of  1905  this  assembling 
class  of  industries  in  the  United  States  yielded  over  $4,000,- 
000,000  worth  of  products.^  Four  of  the  fourteen  groups  into 
which  the  census  report  classifies  industries,  including  leather 
and  its  finished  products,  metal  products,  vehicles,  and  ship- 
building, had  by  far  the  larger  part  of  their  production  made 
by  this  method.  The  miscellaneous  group  of  industries,  em- 
bracing agricultural  implements,  electrical  machinery,  and 
musical  instruments,  made  a  contribution  of  $350,000,000 
to  the  assembling  industries,  while  the  lumber  group  gave 
$170,000,000  worth  in  furniture.  Iron  and  steel  added  a 
total  of  nearly  $800,000,000  of  assembled  goods  in  machinery 
products,  and  the  textile  group  gave  over  $800,000,000  worth 

*  Census  Bulletin^  No.  57,  p.  25. 
115 


116    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

in  men's  and  women's  clothing,  fur  goods,  hats  and  caps, 
millinery,  men's  furnishings,  and  corsets.^ 

These  industries  divide  themselves  into  two  typical 
classes,  which  in  a  measure  correspond  to  the  non-by-product 
plant  and  the  by-product  plant  in  the  analytical  industries, 
except  that  in  the  by-product  plant  the  material  is  taken  from 
the  goods,  while  in  the  assembling  process  the  subsidiary 
plants  contribute  to  the  main  material.  The  assembling  in- 
dustries are  here  divided  into  these  two  groups  which  are 
considered  separately : 

1.  Direct  producing  industries  wherein  the  goods  are  re- 
ceived, worked  upon,  and  assembled  without  the  intervention 
or  using  of  any  intermediary  steps  which  do  not  finally  show 
in  the  finished  goods.  Examples  of  these  are  afforded  by 
shoemaking,  toy  manufacturing,  piano  producing,  and  by 
many  other  industries. 

2.  Indirect  industries  wherein  vast  amounts  of  money 
must  be  spent  in  producing  forms,  patterns,  molds,  and  other 
auxiliary  supplies  before  the  product  can  be  obtained;  as  for 
example,  machine  and  tool  manufacturing,  shipbuilding,  lo- 
comotive making,  general  machine  shops,  and  electrical  sup- 
ply plants. 

One  characteristic  of  the  assembling  industries  of  both 
classes  is  that  the  goods  they  produce  are  made  up  of  a  great 
number  of  parts,  each  one  of  which  must  be  separately  han- 
dled and  treated,  and  adjusted  to  all  the  other  parts  of  the 
completed  article.  A  simple-looking  instrument,  like  a  pi- 
ano, is  made  up  of  several  hundred  pieces,  which  must  be 
carefully  adjusted  to  each  other  to  evolve  the  perfect  instru- 
ment. The  individual  pieces  are  themselves  made  up  of 
parts.  The  keyboard  apparatus  consists  of  a  key  and  ham- 
mer. A  key  is  made  of  about  eight  pieces.  The  hammer 
has  seven  pieces.     A  full  piano  has  fifty-two  white  keys  and 

iCf.  Census  Bulletin^  No.  57,  Table  84,  pp.  76-93. 


ASSEMBLING  INDUSTRIES  117 

thirty-six  black.  In  addition,  there  are  the  strings,  pivots, 
sounding  boards,  and  a  great  many  other  parts  which  in 
themselves  are  made  up  of  other  parts.  In  order  to  get  beauty 
in  workmanship  and  a  trustworthy  article,  all  of  these  things 
must  be  handled  with  discriminating  care  and  deftness. 
Machinery  can  cut  the  lumber,  it  can  twist  the  strings,  smooth 
the  ivoiy,  make  the  felt,  it  can  plane  the  pieces,  but  it  can- 
not assemble  them  without  intelligent  guidance. 

Another  characteristic  common  to  both  types  of  assem- 
bling manufacturing  is  that  in  these  industries,  more  than  in 
any  others,  a  very  large  amount  of  the  work  must  be  done  by 
human  labor.  Assembling  industry  plants,  as  a  rule,  have 
far  more  operatives  to  an  establishment  of  a  given  size  than 
does  any  other  group  of  plants.  This  is  due  to  the  fact  that, 
as  a  rule,  the  assembling  plants  manufacture  direct  con- 
sumption goods  which  are  designed  to  give  immediate  per- 
sonal satisfaction  to  the  consumer.  It  is  true  that  wheat 
grinding  produces  a  consumable  product  in  the  form  of  flour, 
but  the  public  does  not  get  any  immediate  satisfaction  from 
the  flour.  It  must  go  through  the  bakery  and  be  assembled 
with  other  ingredients,  such  as  sugar,  butter,  lard,  etc.,  be- 
fore it  becomes  a  consumable  product.  The  manufacturing 
of  pig-iron  makes  a  consumable  product  for  the  foundryman, 
but  the  cast  pig-iron  in  itself  would  be  of  little  utility  imless 
it  passed  through  the  foundry  and  machine  shop  to  produce 
locomotives  which  can  haul  trains,  or  engines  which  can 
supply  power  to  run  looms. 

The  products  of  assembling  industries  are  in  themselves 
objects  more  or  less  comj)licated  in  their  construction  and 
essentially  specialized  in  their  nature.  They  have  a  great 
amount  of  individuality.  They  are  complex  and  various  in 
construction.  In  many  cases  it  would  be  unprofitable  in  the 
first  place  to  make  machines  to  do  much  of  the  work;  because 
the  machines  would  have  to  be  altered  at  frequent  intervals 
on  account  of  the  changes  in  styles  and  of  the  rapid  improve- 


118    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

ments  which  are  constantly  being  made  in  the  construction 
of  these  direct  consumption  goods.  In  the  second  place, 
machines  to  do  the  work  would  have  to  be  so  complicated 
that  long  periods  of  time  would  be  required  to  evolve  and 
develop  a  profitable  machine. 

The  assembling  industries,  although  having  a  very  great 
deal  of  machinery,  have  machinery  of  a  more  or  less  general 
nature  to  do  work  of  more  than  one  kind  or  size.  These  ma- 
chines of  necessity  require  operatives  who  can  adapt  them  to 
do  new  work,  and  who  must  guide  and  direct  them  while 
they  are  running. 

These  two  characteristics  at  once  bring  up  exceedingly 
important  questions : 

1.  How  shall  the  various  manufacturing  departments  be 
arranged  with  respect  to  the  assembling  department  so  that 
there  will  be  a  minimum  amount  of  handling  of  the  pieces? 

2.  How  shall  the  plant  be  built  so  that  a  comparatively 
large  number  of  workers  will  find  room  and  convenient  facil- 
ities for  doing  their  work? 

It  has  been  seen  in  the  two  preceding  chapters  that  the 
straight-line  method  of  moving  material  through  plants  is 
the  theoretical  ideal  for  cheap  production;  and  it  has  been 
shown  how  various  types  of  plants  have  adhered  to  the  ideal 
and  have  adapted  their  structures  accordingly.  What  is  true 
of  the  continuous  industries  is  also  true  of  the  assembling 
industries.  The  straight-line  method  of  manufacture  is,  if 
considered  from  the  absolute  standpoint,  the  ideal.  The 
buildings  should  be  so  constructed  and  the  departments  so 
arranged  that  there  will  be  no  retracing  of  steps  or  backward 
movement  of  the  parts  in  their  passage  through  the  plant. 

Fig.  8  shows  how  the  straight-line  ideal  may  apparently 
be  varied  and  yet  be  rigidly  adhered  to  in  plant  construction. 
The  diagram  likewise  indicates  in  a  similar  manner  how  the 
Btraight-line  method  may  be  applied  to  the  assembling  pro- 
cesses,    (See  Nos.  4,  5,  6,  11,  12,  and  13,  Fig.  8.)    The 


ASSEMBLING  INDUSTRIES  119 

question  of  providing  room  for  the  employees  will  naturally 
modify  the  geometric  line,  and  the  figure  shows  how  the 
straight  industrial  line  is  maintained  in  many  plants  and 
yet  opportunity  is  given  for  the  employees  to  carry  on  their 
work.  If  it  comes  to  a  question  of  deciding  between  depart- 
ing from  the  straight  industrial  line  and  locating  a  certain 
department  or  set  of  machines  so  that  they  will  be  more  con- 
venient for  the  employees,  it  is  usually  better  to  depart  from 
the  industrial  line  rather  than  make  conditions  such  that  the 
output  of  the  employees  will  be  limited  by  external  condi- 
tions. 

Shoemaking  is  a  good  example  of  the  direct  producing 
industry.  Factory  shoes  are  usually  made  in  two  dozen  lots, 
each  company  confining  itself  to  a  more  or  less  limited  num- 
ber of  styles  and  values  of  shoes.  In  some  cases,  the  styles 
made  by  a  concern  will  be  a  dozen  or  even  less ;  and  then,  on 
the  other  hand,  they  may  extend  into  the  scores. 

To  produce  a  shoe  requires : 

1.  The  Cutting  of  the  Material  for  Uppers. — The  leather 
forming  the  upper  portion  of  the  shoe  is  cut  to  certain  pat- 
terns which  vaiy  with  the  style  of  the  shoe.  The  linings  are 
likewise  cut  from  special  cloth. 

2.  Skiving  or  Leveling. — The  edges  of  the  leather  are 
then  put  through  a  skiving  machine,  which  levels  them  off 
so  that  they  may  be  neatly  turned,  thus  presenting  a  finished 
edge  on  all  open  parts. 

3.  Turning. — The  skived  leather  is  then  passed  over  to  a 
machine  which  apjDlies  cement  to  the  inside  of  the  beveled 
edge  and  deftly  turns  the  leather  over  and  gives  it  its  fin- 
ished appearance. 

4.  Ornamenting. — The  small  perforations  seen  in  the  tips 
and  other  parts,  which  are  put  in  for  ornamental  purposes, 
are  dyed  in  the  leather  at  this  stage  by  means  of  a  Power  Tip 
Press. 

5.  Sewing, — The  different  parts  of  the  upper  are  sewn  to- 


120    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

gether  on  special  sewing  machines;  and  the  cloth  lining  is 
likewise  stitched  to  the  leather. 

6.  Eyeletting. — The  eyelets  and  hooks  are  next  inserted, 
or  buttons  are  attached  at  this  stage  of  the  process.  The 
rapidity  with  which  this  is  done  is  remarkable.  One  ma- 
chine will  place  perfectly  all  the  hooks  and  eyes  in  a  pair  of 
shoes  within  the  space  of  five  seconds. 

7.  Stiffening  Toe. — This  is  done  by  cementing  a  piece  of 
pulp  board  material  between  the  under  part  of  the  tip  and 
the  lining  to  prevent  the  shoe  from  curling  up  on  the  end. 

8.  Blocking  Sole  Leather. — Dies  are  made  for  different 
sizes  and  shapes,  and  the  outsole  is  cut  from  hea\y  hide  by 
means  of  a  powerful  press. 

9.  Blocking  Insole. — This  is  similar  in  process  to  block- 
ing the  outsole,  but  an  inferior  grade  of  leather  is  used. 

10.  Routiding  Soles. — The  roughly  died  out  insole  and 
the  outsole  are  separately  reduced  to  exactly  the  desired  shape 
on  a  specially  designed  machine  called  the  Planet  Rounding 
Machine. 

11.  Evening  Insole. — The  insole  is  passed  through  a  little 
machine  which  reduces  it  to  an  absolutely  even  thickness. 

12.  Splitting  Outsole. — This  is  an  operation  similar  to 
the  evening,  but  the  machine  is  heavier  on  account  of  the 
heavier  leather  that  must  be  shaved  and  cut.  Both  machines 
make  all  soles  uniform  in  thickness. 

13.  Rolling  Outsole. — The  outsole  is  passed  through  a 
heavy  rolling  machine  where  it  is  subjected  to  tons  of  pres- 
sure between  heavy  rolls.  This  brings  the  fibers  very  closely 
together,  and  greatly  increases  the  wear  of  the  shoe. 

14.  Channeling  Insole. — In  this  operation  a  little  slit  is 
cut  along  the  edge  of  the  insole,  extending  about  half  an  inch 
in  toward  its  center.  At  the  same  time  a  little  channel  is 
cut  in  the  leather  so  that  it  may  receive  the  thread  and  per- 
mit the  upper  flap  to  be  smoothly  drawn  over  after  the  insole 
is  attached  to  the  welt  and  upper. 


ASSEMBLING  INDUSTRIES  121 

15.  Cutting  Heels. — The  heel  pieces  are  died  out  from 
small  scraps  of  leather. 

16.  Cementing  Heels. — The  small  pieces  are  firmly  ce- 
mented together,  and  one  piece  especially  selected  is  fastened 
to  the  top  of  the  heel,  thus  giving  a  good  base  for  nailing  it 
to  the  shoe. 

17.  Compressing  Heel. — The  heel  is  put  under  great  pres- 
sure to  give  it  exact  form,  and  to  increase  its  wearing  quali- 
ties. 

18.  Inserting  Insole. — The  insole  is  now  attached  to  the 
last,  and  the  last  is  put  inside  the  upper,  and  a  pulling  ovei 
machine  in  the  hands  of  a  skilled  operator  is  used  to  adjust 
the  last  to  the  upper. 

19.  Lasting. — When  the  last  is  properly  adjusted,  the 
shoe  is  taken  to  the  lasting  machine,  where  the  upper  is 
neatly  stretched  over  the  entire  last.  This  operation  is  one 
of  the  most  difficult  and  important  in  the  shoemaking  pro- 
cess. If  it  is  incorrectly  done,  the  appearance  of  the  shoe  is 
spoiled  and  its  wearing  qualities  are  greatly  impaired.  The 
machine  works  with  almost  human  ingenuity.  It  has  a  set 
of  fingers  which  grab  the  leather,  pull  it  over  the  last,  and 
then  it  inserts,  at  frequent  intervals,  tacks  to  hold  the  leather 
in  shape. 

20.  Welting. — The  welt  is  now  sewed  from  the  inside  lip 
of  the  insole  so  that  the  needle  passes  through  lip,  upper, 
and  welt.  In  this  way  all  three  are  securely  united,  and  the 
welt  protrudes  beyond  the  edge  of  the  shoe.  Just  before 
the  sewing  has  been  done,  the  tacks,  which  were  driven  into 
the  last  to  hold  the  upper  in  place,  are  withdrawn. 

21.  Trimming. — The  surplus  portions  of  the  lip,  up- 
per, and  welt,  are  now  neatly  trimmed  off,  and  the  welt 
is  made  to  stand  out  evenly  from  the  shoe.  After  this  is 
done,  the  tacks  which  held  the  insole  to  the  last  are  with- 
drawn. 

22.  Attaching  Out  sole. — ^The  outsole.  is  covered  with  ce- 


122    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

ment,  and  is  firmly  pressed  upon  the  insole  and  welt  by  means 
of  a  heavy  machine. 

23.  Trimming  Sole. — The  portions  of  the  sole  extending 
beyond  the  welt  are  trimmed  off  so  that  both  welt  and  sole 
make  an  even  edge.  At  the  same  time  a  flap  and  channel 
are  cut  around  the  edge  of  the  outsole,  as  was  done  in  the 
insole. 

24.  Opening  Channel. — The  cut  channel  is  opened  out  on 
a  channel-opening  machine,  making  it  ready  to  receive  the 
stitch. 

25.  Stitching. — The  sole  is  firmly  stitched  to  the  welt  on 
a  powerful  stitching  machine. 

26.  Closing  Channel. — The  inside  of  the  channel  is  coated 
with  cement,  and  the  flap  is  smoothly  drawn  over  so  that  the 
stitches  are  entirely  hidden. 

27.  Leveling  Sole. — The  sole  is  put  under  heavy  pressure 
on  a  leveling  machine,  which  subjects  it  to  a  rolling  process, 
smoothing  the  bottom. 

28.  Taching  JJpiier. — The  portion  of  the  sole  designed  to 
receive  the  heel  is  not  sewn  to  the  welt.  At  this  stage  it  is 
nailed  to  the  upper  and  through  the  insole,  the  nails  being 
turned  by  a  steel  plate  on  the  heel  of  the  last. 

29.  Heeling. — The  heel  is  now  nailed  to  the  shoe  and  the 
bottom  cap  put  on  the  heel. 

30.  Finishing. — This  consists  of  several  steps,  all  tend- 
ing to  give  the  shoe  its  final  form  and  finish. 

81.  Packing  and  Shipimig. 

The  diagram  on  page  123  (Fig.  15)  shows  graphically 
the  relationship  of  these  various  steps  to  each  other. 

The  great  number  of  operations  necessary  to  produce  a 
shoe  makes  it  important  to  order  the  processes  in  the  most 
economical  manner.  The  ideal  order  of  arrangement  is  the 
straight,  industrial  line.  The  assembling  industry  may  be 
regarded  as  a  river  fed  from  many  sources,  the  shipping  room 
corresponding  to  the  mouth  of  the  stream.     The  ideal  plant 


ASSEMBLING  INDUSTRIES 


123 


is  one  which  will  make  the  rivulets  flow  into  the  main  chan- 
nel as  soon  as  possible,  and  yet  not  flow  in  until  all  is  ready 


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leather 

tor  M(>p«rs 

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Tip«i  uppers 

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direct   producing  assembling   lnoastf?y  is  maoe^  to 

APPROACH      THe    CONTINUOUS     TVPET  OF  INDUSThY. 


Fig.  15.— Shoe  Manufacturing. 

for  their  absorption,  otheir\vise  they  wiU  hinder  progress. 
(See  Fig.  17.) 


124    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

Almost  every  part  of  a  shoe  factory  should  be  well  lighted; 
and  since  it  is  important  that  it  be  in  the  midst  of  a  large 
labor  supply  and  easily  accessible  to  good  markets,  both  local 
and  distant,  it  is  necessary  to  place  the  plant  in  either  a  city 
or  suburban  location.  Consequently,  the  plant  cannot  be 
spread  over  too  much  territory,  because  not  only  would  it 
unnecessarily  increase  the  interest  charges  on  the  property, 
but  would  also  increase  the  burdens  of  heating  and  power 
transmission. 

The  general  form  and  structure  of  a  shoe  factory  is  char- 
acteristic of  almost  all  of  the  plants  of  the  direct  producing 
group.  The  establishments  are  units  in  themselves,  having 
few  if  any  outbuildings. 

The  indirect  assembling  industries  differ  greatly  in  their 
plant  construction  from  those  just  considered.  Nearly  all 
machinery-making  plants  require  at  least  three  comparatively 
large  auxiliary  divisions  aside  from  the  machine  shop, 
namely,  the  drawing-room,  pattern  shop,  and  foundry.  If 
the  plant  is  very  extensive,  these  auxiliary  departments  may 
increase  until  they  include  a  carpenter  shop,  brass  foundry, 
blacksmith  shop,  boiler  shop,  punch  sheds,  galvanizing  de- 
partments, and  perhaps  several  others.  In  addition  to  these 
directly  contributing  plants  one  will  almost  invariably  find 
a  pattern  storage  shed,  a  lumber  shed,  power  house,  boiler 
house,  and  possibly  paint  shed,  drying  kilns,  and  other  de- 
partments of  more  or  less  importance. 

The  building  of  a  vessel  probably  offers  the  most  complete 
set  of  operations  common  to  any  assembling  industry-  of  the 
indirect  type.  To  construct  a  ship  it  must,  first  of  all,  be 
designed  in  the  engineers'  offices  and  drawing-rooms.  Here 
the  shape,  size,  and  specifications  for  the  hull,  machinery, 
and  boilers  are  drawn  up.  The  arrangement  of  the  compart- 
ments in  the  vessel  for  carrying  passengers,  cargo,  and  coal, 
and  for  receiving  the  propelling  equipment  is  shown.  The 
furnishings  and  equipment  of  all  the  various  departments  of 


ASSEMBLING  INDUSTRIES  125 

the  vessel  are  specified,  and  detailed  drawings  are  made  of 
every  part  of  the  hull,  machiner}'-,  and  equipment. 

The  drawings  are  then  sent  into  the  three  main  divisions 
of  the  plant,  each  one  of  which  carries  out  its  assignments 
according  to  the  drawings  and  specifications  issued,  the 
three  parts  being  the  Hull,  the  Boiler,  and  the  Motive  Power 
Divisions. 

A.  Hull   Division. 

1.  Forms  and  Templets  Making. — In  the  mold  loft  of 
the  yard  are  received  the  drawings  of  all  hull  parts,  and 
in  here  are  made  all  the  forms  and  templets  which  are 
to  be  used  as  guides  by  the  workmen  in  constructing  the 
huU. 

2.  Keel  and  Rib  Cutting  and  Shaping. — All  the  frame- 
work of  the  vessel  is  cut  from  the  structural  iron  and  bent 
into  shape. 

3.  Plate  Shearing^  Bending,  and  Punching. — The  plates 
which  are  to  make  the  hull  of  the  vessel  are  cut  out  in  a  ma- 
chine called  shears  and  shaped  in  bending  rolls,  and  the 
rivet  holes  are  put  in  by  powerful  punches. 

4.  Keel  Laying  and  Rihhing. — The  foundation  frame- 
work for  the  ship  is  made  by  laying  a  hea^y  piece  of  struc- 
tural iron  the  entire  length  of  the  vessel,  and  from  it  at 
right  angles  are  set  radiating  ribs  of  varying  shapes  and 
lengths,  so  that  when  they  are  covered  with  the  steel  plates 
the  vessel  will  have  the  designed  shape  and  size. 

5.  Fitting  Plates.  — The  plates  which  have  been  previously 
punched  and  shaped  are  now  fitted  to  the  ribs  and  to  each 
other,  the  rivet  holes  are  reamed  out,  and  rivets  inserted  to 
bind  the  plates  together.  All  plates  that  are  to  be  below  the 
water  line  are  usually  hand  riveted,  but  above  the  water  line 
machine  riveters  do  the  work. 

6.  Piping. — When  the  framework  begins  to  be  covered, 
the  pipG  and  steam  fitters  put  in  all  the  piping  necessary  to 


126    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

supply  the  complex  organization  of  the  vessel.  In  it  are  put 
sewage  systems,  steampipe  lines  for  heating  the  compart- 
ments, and  conveying  steam  from  the  boilers  to  the  engines, 
the  plumbing  for  carrying  hot  and  cold  water  for  the  conve- 
nience of  the  passengers,  and  all  piping  necessary  to  supply 
the  machinery  with  water  inlets  and  exhaust  outlets. 

7.  Joinery  Work. — ^Vhile  the  piping  is  going  in  and  the 
hull  is  being  still  further  completed,  the  wood  work  is  intro- 
duced, and  the  carpenters  and  joiners  put  in  all  equipment 
like  staircases,  flooring,  doors,  window  casings,  paneling, 
and  all  other  fittings  specified  by  the  contract. 

8.  Wiring. — ^Vhile  the  fittings  are  being  installed,  elec- 
tricians wire  the  vessel  throughout. 

9.  Caulhing. — At  this  stage  all  the  seams  are  made 
water-tight  by  having  a  tool  go  over  and  swell  the  edges  of 
the  steel  plates  firmly  against  the  side  of  the  piece  to  which 
they  are  attached. 

B.  Boiler  Division. 

1.  Laying  Out. — The  plates  are  laid  out  on  a  floor  and 
marked  for  the  shaping  operations  necessary  to  make  the 
boiler. 

2.  Puncliing. — The  plates  are  punched  for  the  rivets. 

8.  Flanging  and  Bending. — In  order  to  make  a  boiler- 
shell,  the  two  headpieces  must  be  turned  over  like  the  lid  of 
a  baking-powder  can,  and  slipped  into  a  cylindrical  piece  of 
steel,  thus  making  a  complete  cylindrical  boiler  after  all  the 
parts  have  been  riveted  together.  The  turning  of  the  flange 
in  an  inch  and  a  half  steel,  which  is  the  thickness  of  some 
of  the  boiler  shells,  is  a  delicate  and  strength-requiring  opera- 
tion. The  work  is  done  on  a  boiler-head  flanging  machine. 
The  steel  is  highly  heated,  firmly  held  between  the  two  disks 
and  then  the  edge  is  revolved  against  a  roll.  In  a  very  few 
minutes  a  complete  bend  or  flange  is  turned  over. 

4.  Fitting  and  Riveting, — The  plates,  which  have  pre- 


ASSEMBLING  INDUSTRIES  127 

viously  been  punclied,  are  now  put  in  place,  the  holes  are 
reamed  out,  and  the  rivets  inserted. 

5.  Inserting  Tiibes. — In  order  to  present  a  large  heating 
surface  to  the  water,  the  boilers  are  filled  with  a  great  multi- 
tude of  tubes  through  which  the  hot  gases  flow  in  their  course 
from  the  fire  box  to  the  stack. 

6.  Caulking. — Here  all  the  seams  are  made  steam-tight 
by  a  process  similar  to  the  one  used  on  the  hull  of  the  vessel. 

7.  Installing  in  Hull. — The  finished  boiler  is  now  in- 
stalled in  the  hull,  the  fire  boxes  are  attached,  and  non-con- 
ducting material  is  put  around  all  exposed  radiating  surfaces 
to  economize  heat. 

C.  Motive  Power  Division. 

I.  Pattern  Making. — In  the  pattern  shop  the  drawings 
are  received  and  models  of  the  castings  are  made  in  wood  so 
that  the  molder  can  have  a  form  to  which  he  can  build  his 
mold  to  construct  the  casting.  The  making  of  patterns  is  very 
exacting  work,  requiring  highly  skilled  mechanics  to  read 
the  drawings  and  interpret  them  accurately.  As  a  result 
there  is  comparatively  little  division  of  labor  and  no  elab- 
orate equipment  in  the  pattern  shop. 

n.  Foundry  or  Molding  Department. 

1.  Mahing  the  Mold. — In  the  foundry  the  conditions  are 
much  like  those  in  the  pattern  shop,  only  here  unskilled  labor 
can  be  used  to  a  much  greater  degree.  Moreover,  the  units 
handled  in  the  foundry  are  manifold  heavier  than  those  in 
the  pattern  shop,  and  there  is  very  little  assembling  done  in 
the  foundry.  The  process  briefly  consists  of  inserting  the 
pattern  in  proper  supports  and  then  tightly  ramming  sand 
around  it.  After  the  sand  is  fixed  in  shape  the  pattern  is 
withdrawn  and  the  mold  is  smoothed  off  and  coated  with 
some  surfacing  material,  which  will  prevent  the  sand  from 
caving  in  when  the  molten  iron  is  poured  into  it. 

2.  Core  Mahing. — If  a  casting  is  to  be  hoUow,  the  mold 

10 


128    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

must  be  filled  in  with  some  solid  material,  the  size  of  the  hole 
desired  in  the  casting.  These  fillers  are  technically  known 
as  cores,  and  the  cores  are  made  apart  from  the  molds,  dried 
in  ovens,  and  then  set  into  the  molds  after  the  pattern  is 
withdrawn.  The  core  is  then  anchored  to  prevent  it  from 
shifting  when  the  metal  is  poured  around  it.  The  mold  is 
then  assembled  and  bolted  together  ready  for  the  next  step. 

3.  Casting. — After  the  mold  is  fixed  the  casting  is  made 
by  pouring  the  molten  metal  into  openings  reserved  for  its 
reception  at  various  parts  of  the  mold.  The  filled  mold  is 
allowed  to  stand  until  the  metal  has  solidified  and  cooled. 

4.  Clemiing  Castings. — After  the  metal  has  cooled,  the 
mold  is  withdrawn  from  around  the  casting  and  the  adhering 
portions  of  sand  are  chipped  off  by  means  of  air  hammers  in 
the  hands  of  a  rather  unskilled  class  of  workmen. 

III.  Machine  Shop. — When  the  cleaned  casting  is  re- 
ceived in  the  machine  shop,  it  is  slightly  larger  than  the 
drawing  calls  for,  and  is  covered  with  a  scale  which  makes 
perfect  joints  impossible  between  the  parts.  Hence  the  pieces 
of  iron  must  be  cut,  smoothed,  and  adjusted  to  each  other 
until  they  make  a  perfect  fit  throughout  the  entire  mechan- 
ism.    The  steps  in  the  process  are : 

1.  Laying  Out. — Here  the  rough  casting  is  picked  up  by 
a  crane  and  carried  to  a  large,  smooth,  level  table  where  lines 
are  accurately  drawn,  according  to  the  drawings  showing  the 
exact  amounts  that  must  be  trimmed  off  in  order  to  make 
tight  joints. 

2.  Planing  or  Finisliing  Straight  Surfaces. — The  cast- 
ings have  their  straight  surfaces  cut  and  smoothed  on  a  series 
of  tools  known  as  planers,  milling  machines,  shapers,  and 
the  like.  The  usual  practice  is  to  smooth  off  one  surface  and 
use  that  as  a  basis  for  accurately  cutting  the  other  sides. 
The  large  pieces  are  cut  off  on  planers  (see  P,  Fig.  21)  and 
large  milling  machines.  Small  pieces  are  handled  on  shapers, 
small  boring  and  milling  machines,  millers,  and  others. 


ASSEMBLING  INDUSTRIES 


129 


3.  Finishing  tlie  Round  Pieces. — Two  kinds  of  round 
surfaces  may  be  cut,  convex  surfaces  which  are  represented 
by  the  forms  of  shafts  and  other  similar  pieces,  and  concave 
surfaces  as  represented  by  the  inside  of  cylinders  and  the 
like.  Shafts  and  such  bodies  are  usually  cut  on  machine 
tools,  known  as  lathes.  The  piece  to  be  cut  is  firmly  held 
between  two  centers,  and  is  revolved  toward  the  cutting  tool. 


By  courtesy  of  Niles,  Bement.  Pond  Co.,  New  York. 

Fig.  16.— Horizontal  Boring,  Milling,  and  Drilling  Machine. 

This  picture  shows  how  general  are  the  machines  for  large  assembling  industries, 
and  also  how  the  individual  motor  drive  is  applied  to  machinery. 

The  concave  surfaces  are  usually  treated  on  a  boring  mill, 
either  verticle  (see  BM,  Fig.  21)  or  horizontal  (Fig.  16), 
although  much  of  this  work  may  be  done  on  lathes. 

4.  Finishing  Irregular  Pieces. — The  cutting  of  gear  teeth, 
the  putting  in  of  key^vays,  the  drilling  of  holes  and  the  mak- 
ing of  slots,  the  finishing  of  surfaces  having  compound  curves, 
and  any  number  of  incidentjil  operations  which  must  be  done 


130    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

in  the  shop,  are  performed  on  special  machines  designed  foi 
such  purposes,  as,  for  instance,  gear-cutters,  keyway  cutters, 
drill  presses,  either  ordinar}'',  radial,  multij)le  spindle  or 
portable,  Blotters,  and  other  special  machines. 

5.  MaHng  of  Bolts,  Nuts,  and  Small  Parts. — Besides 
the  main  castings  which  must  be  finished  off  and  fitted,  there 
are  hundreds  of  bolts  and  nuts,  small  rods,  oil  cups,  tubes, 
piping,  washers,  keys,  and  other  pieces  of  greater  or  less  size 
necessary  around  the  engine,  in  order  to  hold  the  pieces  to- 
gether, oil  them  properly,  and  to  provide  for  the  taking  up 
of  wear  and  other  incidental  work  necessary  to  make  the 
engine  run,  and  keep  it  in  condition  while  it  is  running. 
These  things  are  made  on  special  machines,  the  most  impor- 
tant of  which  are  the  turret  lathe,  which  is  largely  used  to 
make  nuts  and  bolts  of  large  size,  and  an  automatic  screw- 
making  machine  which  makes  bolts  and  screws  from  the 
straight  rod  of  steel.  This  latter  machine  does  its  work  ab- 
solutely without  the  intervention  of  human  labor  after  the 
bar  of  steel  has  been  inserted. 

6.  After  All  the  Parts  are  Macliined,  They  Must  he 
Gathered  Together  on  the  Assembling  Floor. — When  one 
realizes  the  thousands  of  pieces  that  go  into  a  marine  engine, 
when  one  knows  that  the  weight  of  some  of  these  parts  is 
twenty  tons  or  more,  while  the  dimensions  of  others  are  less 
than  that  of  a  cent,  one  can  appreciate  the  fact  that  ingenuity 
must  be  exercised  in  designing,  building,  and  placing  the 
tools  so  that  the  parts  will  make  one  direct  line  from  the 
beginning  to  the  end  of  their  passage. 

Machine-shop  structure  has  long  been  a  matter  of  grave 
consideration  on  the  part  of  architects  and  engineers.  At  the 
j)resent  time  the  gallery  type  is  the  approved  one  for  a  ma- 
chine-shop building.  In  this  design  there  are  three  main 
divisions  of  the  shop.  (See  Figs.  17  and  21.)  Sections  A 
and  C  have  two  stories.  B  is  kept  clear  of  a  second  floor  to 
ellow  for  the  passage  of  one  or  more  large  cranes  which  handle 


ASSEMBLING  INDUSTRIES  131 

heavy  castings.  In  some  plants  two  tracks  are  made  for  the 
cranes,  one  of  which  is  superimposed  above  the  other,  the 
more  powerful  crane  being  put  above  and  used  only  for  han- 
dling the  heaviest  material  in  the  shop.  The  lower  track 
may  have  several  cranes  of  smaller  capacity. 

The  small  parts  are  carried  by  means  of  elevators  to  the 
upper  floors  of  the  sides  A  and  C.  Here  they  are  put  through 
the  various  machines  necessary  to  get  them  into  the  finished 
shape;  and  as  each  step  is  performed,  they  are  moved  for- 
ward in  the  direction  of  the  erecting  floor,  so  that  by  the 
time  they  are  completed,  they  are  ready  to  be  lowered  to  the 
assembling  or  erecting  floor. 

The  heavy  parts  are  laid  out  on  laying-off  tables  and  then 
given  over  to  the  planers,  millers,  lathes,  and  other  tools  on 
the  lower  floor.  The  machines  also  are  arranged  so  that  every 
succeeding  operation  means  bringing  the  large  piece  nearer 
to  the  assembling  space. 

The  placing  of  the  erecting  floor  in  such  relative  position 
with  regard  to  the  remainder  of  the  shop  has  several  advan- 
tages : 

1.  It  is  in  one  of  the  best  lighted  parts  of  the  shop. 

2.  There  are  no  floors  above  to  interfere  with  the  erection 
of  the  tallest  kind  of  machinery. 

3.  It  is  in  a  place  where  all  parts  of  the  floor  are  easily 
reached,  so  that  one  can  get  to  any  part  of  the  work  under 
construction. 

4.  It  is  under  the  heaviest  cranes,  so  that  all  parts  can 
be  readily  handled. 

5.  It  is  the  converging  point  for  all  material  that  goes 
into  the  finished  product. 

6.  It  is  accessible  for  shipping  purposes. 

In  connection  with  a  machine  shop  it  is  always  necessary 
to  reserve  a  considerable  portion  of  space  for  tool  and  store 
rooms.  The  machines  and  workmen  are  hourly  in  need  of 
Bupplies  and  tools  for  their  various  jobs.    Good  practice  places 


ASSEMBLING   INDUSTRIES  133 

those  divisions  in  a  portion  of  the  shop  where  the  space  taken 
will  not  hamper  the  continuity  of  the  process,  and  yet  will 
be  most  accessible  to  those  operatives  whose  duties  require 
the  greatest  number  of  changes  in  tools. 

In  the  shipbuilding  j)lant  under  consideration  there  are 
two  erecting  floors,  one  for  large  work  and  the  other  for  small 
work.  The  general  course  of  the  parts  for  both  large  and 
small  engines  is  the  same. 

The  crane  arrangement  of  the  plant  is  one  worthy  of  care- 
ful consideration.  If  a  small  engine  has  been  erected  under 
space  A,  the  heavy  crane  above  this  floor  can  pick  up  the 
entire  engine  and  transfer  it  to  the  launchways  without  the 
necessity  of  taking  any  of  the  engine  apart.  (See  Fig.  17.) 
If  a  big  vessel  is  being  built,  the  engines  are  erected  on  the 
large  erecting  floor,  and  when  completed  are  sej^arated  into 
as  large  divisions  as  can  conveniently  be  handled  by  the 
crane.  They  are  then  lifted  to  cars  on  the  tracks  TT,  and 
hauled  to  the  launchways,  where  another  crane  lifts  them 
from  the  cars  and  carries  them  to  the  vessels. 

Fig.  17  shows  the  arrangement  of  one  of  the  most 
recently  constructed  shipyards  in  the  United  States.  It 
does  not  possess  a  foundry,  but  otherwise  its  equipment 
is  complete,  and  it  is  one  of  the  best  arranged  plants  in 
existence  for  inter-departmental  communication.  An  over- 
head crane  with  a  capacity  of  100  tons  can  run  the  entire 
length  of  the  combined  boiler  and  machine  shops,  with 
the  mere  opening  of  the  door  between  them.  In  other  re- 
spects, too,  it  is  well  arranged.  If,  at  any  time,  it  should  be 
desirable  to  add  a  foundry,  it  could  be  added  to  the  right  of 
the  diagram  as  a  continuation  of  the  machine-shop  building. 
For  convenience  of  working  it  is  ideal.  All  divisions,  even 
the  shipyard,  are  under  cover,  so  that  inclement  weather  need 
never  hinder  construction.  The  arrowed  lines  show  the  gen- 
eral course  of  work  through  the  various  departments  to  the 
launched  ship.    The  short  railway  connection  across  the  shops 


134    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

enables  the  ship  cranes  to  handle  anything  that  comes  out  of 
either  of  the  two  shops,  so  that  from  the  time  the  goods  are 
received  from  the  outside  world  until  the  launched  vessel  is 
ready  to  steam  down  the  river  there  is  one  straight  continu- 
ous line  of  work  with  little  if  any  retracing  of  steps. 

The  shipyard  considered  abo'>''e  is  an  examj)le  of  an  assem- 
bling industry.  The  plant,  however,  with  its  construction, 
excellent  as  it  is,  does  not  have  many  railway  connections 
for  handling  its  output.  Elaborate  railroad  connections  for 
such  a  puqjose  are  imxiecessary  in  shipbuilding,  for  the  river 
is  the  avenue  by  which  the  finished  commodity  is  distrib- 
uted. If  a  plant  is  handling  a  product  to  be  distributed  by 
land,  its  railroad  connections  should  be  superior  to  those 
shown  above.  It  is  also  true  that  if  its  product  is  of  such  a 
nature  that  it  can  be  transported  from  department  to  depart- 
ment by  means  of  railroads  instead  of  cranes,  the  former  is 
perhaps  preferable. 

The  three  preceding  chapters  have  considered  the  kinds  of 
industries  and  the  ideal  methods  of  adapting  plants  to  meet 
their  needs.  The  key  to  success  in  building  a  plant  is  to 
make  it  handle  the  work  in  the  cheapest  manner;  and  the 
cheapest  maimer  is  the  one  which  will  send  the  goods  from 
the  beginning  to  the  end  of  the  course  with  the  least  expen- 
diture of  time  and  labor.  The  architect,  however,  is  foolish, 
indeed,  if  he  does  not  recognize  that  there  are  conditions  that 
may  modify  his  ideal  plans.  Every  manufacturer  appreciates 
the  fact  that  to  erect  the  cheapest  building  possible  he  must 
spend  large  sums  of  money  to  provide  for  a  contingency  that 
may  never  occur.  This  subject  wiU  be  reserved  for  the  next 
chapter. 


CHAPTER  X 

FIRE  PRECAUTION,   AND    ITS  EFFECT  ON  LAYOUT 
AND   STRUCTURE 

A  WELL-DESIGNED  establishment  may  deviate  widely  from 
the  plans  just  considered,  and  yet  be  the  best  possible  one 
that  can  be  constructed  to  suit  existing  conditions,  a  fact 
amply  illustrated  by  plants  known  the  world  over  for  their 
economy  in  production.  Apparently  these  plants  violate 
nearly  every  recognized  principle  that  has  been  laid  down  for 
the  industries  of  their  class.  The  Standard  Oil  Company, 
for  instance,  has  refineries  erected  at  various  points  through- 
out the  country,  and  their  arrangement  individually  mani- 
fests a  most  scattered  and  ground-wasting  design. 

From  the  industrial  and  chemical  standpoints,  oil  refin- 
ing is  a  continuous  analytical  industr}'-  having  to  do  with  the 
handling  of  liquids.  In  many  respects  it  is  similar  to  sugar 
refining.  The  crude  oil  is  received  and  heated,  and  from  it 
are  first  driven  off  gas  and  the  light  oils.  The  residue  is 
passed  on  to  other  stills  and  subjected  to  further  heating  and 
condensing  operations  until  the  crude  petroleum  eventually 
becomes  gas,  benzines,  light,  volatile  illuminating  oil  known 
as  "water  white,"  a  heavier  grade  called  "standard  white," 
another  grade  designated  as  ' '  straw  white, ' '  machinery  or 
lubricating  oil,  paraffine  oils,  petrolatum,  or  vaseline,  cylin- 
der oil,  refined  paraffine,  and  coke.  There  are,  of  course, 
other  products  from  the  refineries  made  by  further  separation 
and  treatment  of  the  native  petroleum,  but  they  are  all  ob- 
tained by  the  same  means — successive  distillation,  filter 
pressing,  or  sweating  the  crude  oil  and  its  derivg-tives.     ThQ 

13& 


136    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

ideal  structure  for  an  oil  plant  may  appear  to  be  one  with 
the  lines  of  a  sugar  refinery,  a  high  building  situated  near 
waterways  and  railroad  facilities.  Why,  then,  do  engineers 
of  the  oil-refining  business  so  waste  space  and  power?  Be- 
cause oil  is  so  inflammable  that  it  must  be  kept  as  far  from 
flames  as  possible.  One  cannot  be  too  careful,  for  in  every 
plant  there  are  occasional  outbreaks  of  fire  in  some  portions. 
So  great  is  the  fire  danger  in  connection  with  oil  refining  that 
insurance  companies  cannot  afford  to  assume  the  risk.  Fire 
seems  bound  to  break  out  somewhere  in  the  establishment  in 
the  course  of  time,  and  if  the  departments  are  not  isolated, 
an  entire  plant,  worth  millions  of  dollars,  may  become  a  heap 
of  scrap  metal  and  rubbish.  On  account  of  the  great  danger, 
an  oil  refiner}^  must  be  situated  in  some  remote  section  apart 
from  other  valuable  property.  It  must  have  a  large  area,  its 
buildings  must  be  widely  separated,  and  every  precaution 
taken  against  fire  loss.  Fig.  18  gives  some  idea  of  the  scat- 
tered way  in  which  the  divisions  of  the  distilling  depart- 
ments are  situated,  and  shows,  also,  the  way  in  which 
buildings  are  separated. 

A  gas-making  establishment  affords  another  illustration 
of  a  plant  which  can  protect  itself  from  fire  only  by  building 
on  large  stretches  of  ground  and  in  remote  quarters.  Gas  is 
a  product  more  inflammable  than  oil,  but  the  raw  material 
is  not  so  susceptible  to  ignition.  Let  a  fire  once  occur  in  a 
gas  plant  and  the  results  may  be  calamitous.  If  a  gas-holder 
leaks  and  air  creeps  into  the  tank,  a  rise  in  temperature  or  a 
carelessly  struck  match  will  give  a  vivid  flash  and  a  terrific 
explosion.  The  proof  of  a  fire  is  not  a  mass  of  flame,  but  a 
lot  of  bent  plates  and  twdsted  beams  of  iron. 

For  ordinaiy  kinds  of  manufacturing  the  causes  of  fire 
may  be  divided  into  the  common  and  the  special  hazards. 
The  common  hazards  include  those  fires  which  may  occur  in 
any  kind  of  a  building,  whether  it  be  a  department  store  or 
a  m^bcbii^  shop,  a  slaughtering  establishment,  or  a  cotton 


FIRE  PRECAUTION  137 

mill.     The  special  hazards  include  the  fires  which  grow  out 
of  some  risk  peculiar  to  a  plant  of  any  particular  type. 

A  good  classification  of  the  common  and  special  hazards 
is  found  below,  copied  from  an  article  by  Henry  A.  Fiske, 
entitled  "Causes  of  Fire." 

"The  Common  Hazards  may  be  divided  into  the  following  gen« 
eral  classes  and  sub-classes : 

Lighting : 

Electric  (Arc). 

"        (Incandescent). 

Gas  (City  or  Town). 

Gasolene  Gas. 

Acetylene  Gas. 

Kerosene  Oil  Lamps. 
"  "  Lanterns. 

"  "  Torches. 

Candles. 
Heating : 

Steam. 

Hot  Air. 

Stove,  Coal. 
"       Gasolene. 
"       Oil. 
Power : 

Shafting  and  Bearings. 

Steam  Engines. 

Gas  Engines. 

Gasolene  Engines. 

Electric  Motors. 
Boiler  (or  Fuel)  : 

Fuel,  Coal. 
"     Waste  Material  or  Refuse. 

Overheated  Woodwork. 

Sparks  from  Stack. 

Defective  Chimney. 

Ashes. 
Rubbish  (or  Sweepings). 
Oily  Material : 

Oily  Waste. 

Other  Oily  Material. 
Smoking. 
Lightning. 

Sparks  from  Locomotive*. 
Miscellaneous. 


138    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 


The  Special  Hazards  will  vary  according  to  the  class  of  risk, 
but  may  be  divided  into  the  following  general  divisions : 

1.  Storage  and  Handling  of  Raw  Stock. 

2.  Preparing  Raw  Stock. 

3.  Making,  or  General  Manufacture. 

4.  Finishing. 

5.  Waste  Material. 

While  some  classes  of  manufacturing  risks  will  have  only  one 
or  two  of  the  above  groups,  others  will  include  all  of  the  divisions. 

Besides  the  two  general  classes  of  causes,  i.e..  Common  and 
Special  Hazards,  may  be  noted  the  Exposure  and  Incendiary  iires, 
which  hardly  admit  of  any  general  classification,  and  are  not  in- 
cluded in  these  tables."  i 

The  relative  importance  of  these  classes  in  causing  fires 
may  be  judged  from  this  table: 

AVERAGE  PERCENTAGES  BY  GROUPS  AND  INDIVIDUAL  HAZARDS, 
ALL  THE  CLASSES  COMBINED  :  ^ 

Per 

Cent. 


Common  Hazards. 
Group  I. 


Common  Hazards. 
Group  II. 


Special  Hazards. 


L 


Light 6 

Heat 2 

Power 7 

Boiler  and  fuel 12 

Total 27 

Rubbish  and  sweepings 4 

Oily  material 3 

Smoking 2 

Lightning 2 

Locomotive  sparks 3 

Miscellaneous 3 

Total 17 

I.  Storage  raw  stock 6 

II.  Preparing 8 

III.  Making.... 26 

IV.  Finishing 7 

V.  Waste  materials 10 

Total 57 


^Insurance  Engineering,  "Causes  of  Fire,"  by  Henry  A.  Fiske, 
July,  1907,  Vol.  XIV,  pp.  5-7. 

2  Ibid. ,  pp.  13, 14 ;  the  percentages  are  evidently  not  quite  exact, 
as  the  total  amounts  to  101,  J.  C.  D. 


FIRE  PRECAUTION  189 

The  main  causes  of  fire  are  bad  housekeeping  and  care- 
'essness.  Twenty  per  cent  of  all  fires  can  be  traced  to  the 
fact  that  the  owners  of  plants  permitted  the  accumulation 
of  dirt,  oily  waste,  and  other  easily  inflammable  material. 
From  the  above  table  no  less  than  7  per  cent  of  the  common 
hazard  outbreaks  are  due  directly  to  rubbish  and  sweepings 
and  oily  waste,  while  among  the  special  hazards  10  per  cent 
are  the  result  of  the  improper  disposition  of  waste  materials. 

Fires  due  to  the  lighting  apparatus  are  to  a  very  great 
extent  caused  by  carelessness.  On  the  whole,  incandescent 
bulbs  are  safer  than  arc  lamps;  and,  if  the  wiring  and  lights 
are  properly  installed,  electric  illumination  is,  from  the  in- 
surance point  of  view,  preferable  to  any  other  kind.  An 
electric  fire  is  almost  invariably  due  to  faulty  installation, 
lack  of  care  in  maintenance,  or  the  careless  use  of  the  electric 
lamp. 

Power  fires  are  commonly  caused  by  poorly  hung  shaft- 
ings, by  shaftings  not  being  properly  watched,  by  hot  bear- 
ings, and  loose  pulleys.  Belt  holes  running  between  the 
main  floors  of  a  building  are  very  dangerous  risks,  because 
the  friction  of  the  belt  is  apt  to  start  a  fire,  and  the  holes 
between  the  floors  are  ideal  means  to  promote  its  spread. 

Boiler  and  fuel  fires  can  be  almost  completely  eliminated 
by  taking  care  to  detach  the  boiler-room  from  the  main 
building  and  to  construct  it  of  non-inflammable  material 
throughout. 

Among  the  special  hazards  the  table  shows  that  about  26 
per  cent  of  the  fires  have  been  caused  in  the  making  or  actual 
manufacturing  process.  Few  fires  are  the  result  of  one  cause, 
and  usually  the  special  hazard  of  a  business  acts  in  combina- 
tion with  some  common  oversight.  For  example,  in  a  cotton 
mill  the  principal  hazards  are  in  the  openers  or  scutchers, 
where  foreign  material,  coming  in  contact  with  the  steel  teeth, 
causes  sparks  which  ignite  loose  cotton.  Place  the  scutchel 
on  a  clean  floor  and  the  fire  will  have  little  chance  to  spread 


140    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

before  it  is  quenched.  In  the  card-rooms  the  air  is  perme' 
ated  with  fine  cotton,  and  the  floors  are  apt  to  gather  accu- 
mulations within  a  very  short  time.  If  here  an  electric  short 
circuit  takes  place,  or  there  is  a  badly  installed  electric  light, 
a  fire  is  almost  inevitable. 

Flour-mill  records  show  the  following :  Fires  due  to  spon- 
taneous combustion  of  stock  and  dust  explosions,  12  per 
cent,  conveyers  4  per  cent,  grinding  8  per  cent,  cleaning  ma- 
chines 4  per  cent,  and  special  miscellaneous  hazards  1  per 
cent.  Contrasted  with  that,  71  per  cent  of  the  fires  are  due 
to  common  causes.^ 

In  foundries  special  hazards  total  82  per  cent,  in  which 
the  cupola  causes  86  per  cent,  the  melting  furnaces  13  per 
cent,  core  ovens  9  per  cent,  molding  and  casting  12  per  cent, 
miscellaneous  special  hazards  12  per  cent,  and  the  ordinary 
causes  make  up  but  18  per  cent.^ 

Shoe  factories  have  19  per  cent  of  their  fires  caused  in 
cementing,  6  per  cent  in  bottoming,  3  per  cent  in  waxing 
heels,  6  per  cent  in  naphtha  and  naphtha  blacking,  4  per  cent 
in  the  waste  chute,  with  11  per  cent  due  to  miscellaneous 
accidents,  and  51  per  cent  due  to  common  causes.^ 

Although  on  many  occasions  fire  would  not  occur  were 
carelessness  not  evident,  the  object  of  the  builder  of  a  factory 
is  to  construct  his  plant  in  such  a  way  that  an  occasional 
oversight  will  not  result  in  the  destruction  of  his  j)roperty. 
At  the  present  time  there  are  two  types  of  factory  construc- 
tion which  succeed  in  limiting  combustion — slow  burning, 
and  fire  proof. 

The  slow-burning  type  received  its  highest  development 
in  New  England  among  the  textile  factories,  where  it  is 

1  "Handbook  of  Fire  Protection,"  by  Everett  W.  Crosby  and 
Henry  A.  Fiske,  Fourth  Edition,  p.  114. 

2  Ibid. 
«Ibid.,  p.  121. 


FIRE  PRECAUTION  141 

generally  known  as  mill  construction.  Mill  construction  is 
less  costly  than  fireproof  work,  and  when  combined  with  the 
automatic  sprinkler  system,  with  reasonable  care  it  makes  a 
safe  building.  The  principles  of  mill  construction  involve 
ten  ideas. 

1.  There  shall  be  no  openings  between  floors,  either  to 
admit  belts,  stairways,  elevator  shafts,  or  for  any  purpose 
whatsoever. 

2,  There  must  be  no  concealed  places  in  floors  or  walls 
which  will  permit  of  the  hidden  development  of  a  fire.  This 
necessitates  the  using  of  very  heavy  floor  timbers,  spaced 
from  eight  to  twelve  feet  apart,  and  the  floors  must  be  con- 
structed of  three  to  four  inch  planks  with  single  or  double- 
top  boarding.  Thus  all  the  joists  are  exposed  and  readily 
accessible  to  hose  or  sprinkler  water. 

8.  The  floors  must  not  only  be  free  from  large  openings, 
but  they  must  be  as  nearly  air  and  water  tight  as  possible. 
This  demands,  besides  the  use  of  the  heavy  timber  mentioned 
above,  that  the  lumber  must  be  well  seasoned  and  laid  down 
in  a  skilful  manner. 

4.  The  outside  walls  of  the  building  should  be  so  built  of 
brick  or  concrete  that  there  is  no  danger  of  fire  breaking 
through,  and  division  walls  are  to  be  carried  at  least  three 
feet  above  the  roof  to  prevent  flames  from  leaping  over.  It 
is  also  desirable  to  have  these  walls  winged  on  either  side  of 
the  building  to  prevent  a  possible  fire  from  leaping  around 
the  edges. 

5.  If  there  must  be  openings  in  walls  between  depart- 
ments, they  are  to  be  protected  with  heavy  fire  doors  or  wire- 
glass  windows,  or  fireproof  shutters  on  the  windows.  These 
are  designed  to  confine  a  fire  to  its  place  of  origin. 

6.  The  elevator  shafts,  stairways,  and  necessary  passage- 
ways between  the  floors  must  be  entirely  enclosed  in  solid 
brick  walls  on  all  sides  opening  into  the  plant.  The  only 
exception  to  this  is  in  the  belt  tower,  where  sufficient  Bj^a^ 


142    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

must  be  allowed  in  the  wall  to  permit  the  shaft  or  belting  to 
go  through.  The  belting,  however,  does  not  pass  from  one 
floor  to  the  other.  Even  in  the  belt  tower  there  is  no  direct 
communication  between  floors. 

7.  The  power  house  of  the  plant  must  be  apart  from  the 
main  building  anl  not  over  one  story  in  height.  The  height 
of  the  fabricating  building  must  not  exceed  five  stories,  or 
sixty-five  feet  above  the  ground  level. 

8.  Stacks,  flues,  and  chimneys  must  be  of  brick  or  some 
approved  fireproof  material. 

9.  The  roof  must  be  flat  and  smooth,  with  just  sufficient 
pitch  to  provide  for  proper  drainage,  and  must  be  covered 
with  metal,  gravel,  or  approved  composition.  Cornices 
should  be  composed  of  incombustible  material. 

10.  The  building  should  be  divided  up  into  fire  sections, 
each  one  not  exceeding  5,000  square  feet,  unless  adequately 
equipped  with  sprinklers. 

Fig.  19  shows  a  sketch  of  the  general  protective  schemes 
used  in  a  slow-burning  building. 

Mill  construction,  while  often  effective,  has,  partly 
through  lack  of  care  and  partly  through  the  expensiveness  of 
lumber,  fallen  into  disfavor,  and  is  beginning  to  yield  place 
to  fireproof  construction.  In  the  fireproof  building,  all  the 
precautions  taken  in  mill  construction  are  employed,  but  in- 
stead of  using  timber  in  any  j)art,  it  must  use  either  brick, 
terra  cotta,  concrete,  steel,  iron,  or  some  other  fire-resisting 
material;  and,  moreover,  all  steel,  iron,  or  other  metallic 
material  which  is  likely  to  bend  or  weaken  in  the  presence 
of  heat,  must  be  adequately  covered  with  non-conducting 
fireproof  material,  which  will  not  permit  these  supports  to 
bend  or  crumble  in  the  presence  of  fire.  The  doors  and  win- 
dows of  the  fireproof  building  must  be  made  of  other  than 
combustible  material.  Everything  should  be  unbumable, 
and  at  the  same  time  the  structure  should  be  so  made  that 
there  will  be  no  spaces  or  cavities  to  permit  of  the  accumula- 


FIRE  PRECAUTIOM 


143 


tion  of  material  away  from  easy  view.     No  section,  however 
small,  should  be  built  in  such  a  way  that  water  or  any  other 


tnttiSSORC  TAMR 


<^^'- 


ELEVnTlOM     OF   APPf?oveD      fvtILl.     CTOMSTRUCTIOM 
rACTORV        SECTION     A- A" 


BUANK  WALLS    e^TENO    3    FEET    ABOVE    (?oor 
JK^^jKk  STAt^DAiTD  n*?e  DOOI75 


M  IH  Hia: 


STANDAPD  wn?e  f^Ua^S  WINOOVUS 
OR    SHUTTERS     ON  EACH    wlf^OOVO 

30  FCET   rwoi  coif«e(^ 


.    .^      I    I-,        L^      .^  »     .-■     ,^ 


PLflKl      OF   flPPI?0wEO      MlLU     CoMST(?UCTlorJ' 


Fig.  19.— Elevation  and  Plan  of  Slow-Burning-  Construction. 

extinguishing  material  cannot  be  quickly  and  accurately  ap- 
plied. 

11 


144    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

For  a  number  of  years  there  has  been  much  discussion  of 
the  question  of  the  best  building  material  for  factory  pur- 
poses. At  one  time,  brick-mill  construction  was  considered 
by  far  the  most  acceptable.  There  seems  to  be  a  tendency, 
however,  within  recent  years,  to  employ  reinforced  concrete, 
to  a  great  degree,  as  it  is  proving  to  have  very  satisfactory 
fireproof  qualities,  and  is  cheaper  than  structural  steel  prop- 
erly reinforced  and  covered  with  insulation.  The  Turner 
Construction  Company  states  of  some  structures  it  recently 
erected :  ' '  The  cost  of  these  buildings,  according  to  estimates, 
made  by  the  Bush  Terminal  Company,  based  upon  authori- 
tative sources,  was  something  over  10  per  cent  less  than  what 
the  same  structure  would  have  cost  in  first-class  structural 
steel.  The  cost  as  compared  to  mill  construction  was  found 
to  be  in  excess  of  not  over  5  per  cent. ' '  The  Robert  Gaii 
Company,  a  large  paper  goods  concern,  has  two  buildings 
which  contrast  the  value  of  the  older  style  of  protection  with 
the  fireproof  design.  Across  the  street  from  the  new  build- 
ing, erected  by  the  Turner  Construction  Company,  are  two 
slow-burning,  mill-construction  buildings  of  large  size.  "Un- 
der the  same  conditions  of  ownership,  occupancy,  usage, 
sprinklers,  installations,  contents  and  exposure  hazards,  the 
rates  on  the  mill-constructed  buildings  are  21.4  cents  on  the 
building  and  65.6  on  the  contents.  On  the  reinforced  con- 
crete building  12.2  cents  on  the  building  and  29.6  cents  on 
the  contents.  Furthermore,  the  officials  of  the  Gair  Com- 
pany are  the  authority  for  the  statement  that  the  building 
saves  them  probably  $5,000  a  year  in  eliminating  vermin 
loss."  With  regard  to  the  cost  of  construction,  the  mill 
buildings  have  about  a  5  per  cent  difference  in  their  favor, 
while  the  concrete  cost  20  per  cent  less  than  structural  steel 
properly  guarded. 

The  photograph  (Fig.  20)  shows  an  interesting  fire  test 
which  well  contrasts  the  lasting  powers  of  the  two  types 
of  building  in  case  of  fire.     The  fixe  started  on  the  fourth 


rti 


FIRE  PRECAUTION  145 

floor  of  the  reinforced  concrete  building,  and  burnt  itself  out 
without  spreading  to  any  of  the  other  floors  above  or  below. 
It  did,  however,  break  through  a  wall  opening  into  the  build- 
ing next  door  and  completely  burned  out  the  two  upper  floors 
and  ruined  the  entire  contents  of  the  structure.  According 
to  the  Trussed  Concrete  Steel  Company,  ' '  special  attention  is 
called  to  the  fact  that  in  the  Kahn  System  Building  the 
sprinkler  system  was  not  completed,  and  was,  therefore,  not 
working,  whereas  in  the  mill-constructed  building  the  sprink- 
ler system  was  in  good  condition.  .  .  .  Had  the  fire  doors 
been  in  place  between  the  old  and  new  structures,  the  fire 
would  undoubtedly  have  burned  itself  out  without  getting 
into  the  mill  constructed  building." 

For  some  time,  concrete  buildings  were  regarded  with 
disfavor  by  insurance  men  because  of  their  liability  to  col- 
lapse while  in  course  of  erection.  Insurance  Engineering 
reports  a  number  of  such  disasters,  but  investigation  has 
proved  that  the  fault  has  been  due  to  poor  workmanship  and 
inferior  design  rather  than  to  any  inherent  weakness  in  the 
properly  reinforced  material.  Until  concrete,  reinforced  or 
not,  has  completely  hardened  or  set,  it  must  be  supported  in 
casings  because  of  its  more  or  less  fluid  condition.  If  care- 
less inspectors  and  unscrupulous  contractors  neglect  this 
necessary  precaution,  there  is  grave  danger  that  their  penny 
wisdom  may  cause  the  death  of  some  workers  and  be  the 
means  of  their  own  financial  ruin. 

Aside  from  the  material  which  makes  up  the  body  of  the 
building,  manufacturers  and  others  seek  supplementary  fire 
protectors.  The  automatic  sprinkler  system  is  the  most  effec- 
tive protector.  For  twelve  years,  the  National  Fire  Protective 
Association  has  a  record  of  6,064  fires  in  sjDrinkled  risks 
where  the  heat  was  sufficient  to  operate  the  sprinklers.  Sixty- 
seven  per  cent,  or  4,039,  of  these  fires  were  practically  or  en- 
tirely extinguished  by  the  sprinklers.  Twenty-seven  per  cent, 
or  1,647,  were  held  in  chgck  so  that  additional  help  put  them 


146    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

out  at  a  small  loss.  Only  6  per  cent,  or  378,  of  the  fires  were 
uncontrolled  by  the  sprinkler  system.  A  careful  study  was 
made  of  the  unsuccessful  systems,  and  the  following  table 
shows  the  causes :  * 

Number.      Per  Cent 

Defective  or  partial  equipment 87  23 

Failure  due  to  water  being  shut  off 87  23 

Hazard  too  severe  for  control 38  10 

Faulty  building  construction  and  obstruction 35  9 

Exposure  or  conflagration 29  8 

Inadequate  or  light  water  supply 21  6 

Water  supplies  crippled  by  explosion 12  3 

Defective  dry  valve  or  dry  system 10  3 

Water  supplies  crippled  by  freezing 9  2 

Unsatisfactory  action  of  high  test  heads 7  2 

Unaccounted  for  and  miscellaneous 43  11 

378  100 

The  automatic  sprinkler  consists  of  a  series  of  pipes  ar- 
ranged in  a  systematic  manner  under  the  ceilings  of  the 
rooms  with  valves  placed  at  regular  intervals  which  are  closed 
with  some  easily  fusible  metal.  In  case  of  a  fire  the  tempera- 
ture of  the  room  will  soon  rise  to  the  point  where  the  metal 
melts,  opening  the  valve  and  causing  it  to  throw  out  a  spray 
of  water. 

In  order  to  have  an  effective  sprinkler  protection,  the  fol- 
lowing conditions  should  operate  together. 

1.  The  building  should  be  so  constructed  and  the  sprink- 
lers so  distributed  that  there  will  be  no  parts  either  concealed 
or  otherwise  out  of  range  of  the  quenching  stream. 

2.  There  must  be  .a>  constant  supply  of  water  great  in 
volume  and  sufficiently  high,  in  pressure  to  make  it  always 
possible  to  guarantee  that  the  water  will  reach  its  designed 
range  at  any  time. 

3.  The  pipes  must  have  adequate  diameter  to  permit  of 


"Handbook  of  Fire  Protectionj  •'  by  Crosby-Fiske,  p.  236, 


FIRE  PRECAUTION  147 

the  passage  of  enough  water  to  the  valves,  and  the  valves 
must  be  freely  acting  at  all  times. 

4.  Care  must  be  taken  that  the  water  does  not  freeze  in 
the  pipes,  and  that  acid  fumes  or  chemicals  do  not  affect  the 
working  of  the  valves.  If  either  one  of  these  things  operate, 
the  most  expensive  and  elaborate  system  may  prove  utterly 
worthless. 

The  Crosby-Fiske  Handbook  contains  diagrams  of  a  num- 
ber of  distributing  schemes  showing  both  the  approved  and 
unapproved  method  of  arranging  the  pij^es.  No  less  than 
125  sprinkler  valves  are  also  pictured,  and  of  that  number 
only  seven  are  approved  by  the  Fire  Underwriters'  Associa- 
tion of  the  United  States. 

To  provide  for  cases  wherein  the  nature  of  the  risk  makes 
it  impossible  to  prevent  water  from  freezing  in  the  danger 
zone,  there  has  been  devised  the  dry  sprinkler  system.  In 
the  dry  sprinkler  system  air  is  pumped  into  the  pipes  in  or- 
der to  back  the  water  into  a  non-freezing  zone.  In  the  pres- 
ence of  excessive  heat  the  sealing  metal  on  the  valves  will 
melt  as  in  the  ordinary  system.  In  a  few  moments  the  air 
will  escape  through  the  resulting  openings  in  the  spraying 
devices  followed  by  a  stream  of  water. 

In  order  to  keep  up  the  pressure  in  the  sprinkler  system 
two  schemes  can  be  used,  the  gravity  tank  and  the  pressure 
tank.  The  gravity  tank  is  the  older  of  the  two  ideas,  and  is 
ample  for  all  ordinary  cases.  Such  a  tank,  according  to  the 
underwriters'  specifications,  must  have  a  capacity  of  at  least 
5,000  gallons.  Ten  thousand  gallons  is  urged,  and  tanks  with 
capacities  of  over  one  hundred  thousand  gallons  are  not  un- 
common. The  minimum  height  requirement  for  the  tank  is 
not  less  than  25  feet  above  the  highest  sprinkler  in  the  estab- 
lishment. There  are  two  methods  of  erecting  the  tank.  In 
establishments  which  are  all  enclosed  within  the  same  set  of 
walls,  and  in  places  where  the  ground  is  limited,  a  common 
scheme  is  to  perch  it  on  top  of  the  main  building  itself. 


148    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

This  place  is  objectionable  because  it  tends  to  weaken  the 
building.  Insurance  comj)anies  are  opposed  to  having  build- 
ings topped  with  much  weight,  unless  extra  precautions  are 
taken  to  strengthen  the  holding  walls.  A  later  and  more 
approved  plan  is  to  have  special  structural  work  provided  for 
the  gravity  tanks.  Where  there  are  a  number  of  buildings, 
or  extensi-ve  grounds,  a  special  tower  is  frequently  constructed 
for  the  vessel. 

The  pressure  tank  is  an  automatic  device  consisting  usu- 
ally of  a  cylindrical  tank  placed  horizontally  and  located  in 
the  upper  stories  of  the  building.  Its  cajmcity  varies  from 
4,500  to  9,000  gallons  of  water  or  more,  and  it  is  kept  two 
thirds  full  of  water.  The  other  third  consists  of  air  under 
pressure,  always  over  75  pounds  to  the  square  inch,  and  fre- 
quently reaching  150  and  more.  Connected  with  the  pressure 
tank  are  two  pumps,  one  for  air  and  the  other  for  water,  so, 
whenever  the  pressure  drops  down  or  the  water  begins  to  flow 
out,  the  replenishing  of  both  air  and  liquid  can  readily  take 
place. 

Many  establishments  do  not  have  sprinkler  systems,  but 
nearly  all  do  take  the  precaution  to  install  fire  hose.  To 
make  a  hose  system  efficient  there  must  be  a  constant  supply 
of  water  under  considerable  pressure.  This  is  usually  main- 
tained by  either  a  gravity  or  pressure  tajik,  as  described 
above.  There  must  also  be  installed  a  piping  system,  to 
which  are  fitted  frequent  outlets  for  hose  connection.  Good 
practice  demands  that  the  outlets  shaU  be  between  100  and 
200  feet  apart,. and  that  the  length  of  the  hose  shall  be  from 
50  to  100  feet,  neatly  folded  on  swinging  racks.  The  effec- 
tiveness of  hose  protection  depends  upon  two  things,  a  con- 
stant supply  of  water  under  pressure  at  the  hose  coupling  and 
people  with  presence  of  mind  around  to  use  it  when  occasion 
arises. 

Aside  from  the  sprinkler  system  and  the  hose,  there  are 
two  types  of  hand  protection,  chemical  fire  extinguishers. 


FIRE  PRECAUTION  149 

and  the  fire  pail.  There  are  several  types  of  chemical  fire 
extinguishers,  namely,  the  liquid  hand  extinguisher  enclosed 
in  three-gallon  upset  tanks,  the  chemical  tank  on  wheels, 
built  usually  in  40  to  60  gallon  sizes,  stationary  chemical 
tanks,  and  dry  powder  extinguishers.  The  most  effective 
chemical  extinguisher  is  the  small  upset  tank  combination. 
It  plays  a  jet  of  extinguishing  fluid  some  forty  feet  for  nearly 
one  minute.  The  extinguishing  material  usually  contains 
carbonic-acid;  gas  and  suljjhate  of  soda  in  solution.  When  it 
comes  in  contact  with  the  burning  mass,  soda  salts  are  de- 
posited forming  a  coat  of  material  which  tends  to  exclude  air 
and  retard  combustion.  While  in  operation  a  considerable 
pressure  is  generated  in  the  extinguisher.  At  ordinary  tem- 
perature a  pressure  of  125  pounds  accumulates  within  the 
tank,  and  if  for  any  cause  whatever  the  nozzle  becomes  closed, 
200  pounds  and  over  may  be  reached.  One  can  see  how  a 
cheap  extinguisher  may  be  a  very  dangerous  instrument  in 
the  hands  of  an  operator,  because  any  concealed  weakness 
makes  it  liable  to  explosion.  The  chemical  tanks  have  not 
as  yet  been  thoroughly  approved  by  the  fire  underwriters, 
while  the  dry-powder  extinguishers,  according  to  the  Crosby- 
Fiske  handbook,  have  been  the  subject  of  the  following  cir- 
cular of  the  National  Fire  Protective  Association.  "In  view 
of  the  fact  that  several  so-called  fire  extinguishers,  consisting 
generally  of  sheet-metal  tubes  filled  with  mixtures  of  bicar- 
bonate of  soda  and  other  materials  in  powdered  form,  have 
been  widely  advertised  as  suitable  for  use  for  fire  extinguish- 
ing purposes^  this  committee  has  to  report  that  in  its  oi^inion 
all  forms  of  dry-powder  fire  extinguishers  are  inferior  for 
general  use,  that  attempts  to  extinguish  fires  with  them  may 
cause  delay  in  the  use  of  water  and  other  approved  ex- 
tinguishing agents,  and  therefore  their  introduction  shoidd 
not  be  encouraged."^ 

» "Handbook  of  Fire  Protection,"  hy  Crosby-Fiske.  pp.  185, 1S6. 


150    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

No  matter  how  weU  protected  a  plant  is,  it  should  alwayc 
be  so  eqiiipj)ed  that  human  beings  can  be  informed  at  once 
when  a  fire  is  starting.  Even  if  we  have  an  automatic  ex- 
tinguisher, there  should  be  some  quick  means  of  giving  an 
alarm.  In  one  case  a  sprinkler  system  operated  so  effec- 
tively that  it  flooded  an  entire  building,  destroying  far  more 
goods  than  the  fire  itself.  It  is  also  advisable  to  have  a 
sprinkler  alarm  in  order  to  notify  people  that  a  fire  is  in 
progress,  because  it  is  by  no  means  impossible  for  a  fire  to 
get  utterly  beyond  control  of  the  sprinkler  system  within  a 
very  brief  period  of  time.  The  sooner  human  aid  is  attracted, 
the  better  it  is  for  all  concerned,  because  other  means  can  be 
taken  to  quench  the  fire,  and  after  it  is  extinguished,  all  un- 
necessary water  damage  can  be  prevented  by  turning  off  the 
water.  It  is  advisable  to  have  a  sprinkler  alarm  for  another 
reason.  Sometimes  the  sprinklers  accidentally  break  or  leak, 
causing  water  to  flow  when  there  is  no  fire  at  all. 

Where  there  is  no  sprinkler  system,  automatic  fire  alarms 
are  especially  desirable.  There  are  many  kinds  of  such  de- 
vices on  the  market.  One  common  scheme  of  fire  signalling 
is  to  place  thermostats  from  ten  to  twelve  feet  apart  at  all 
portions  of  a  risk.  Fire  alarms  are  used  for  all  kinds  of 
purposes.  Some  are  put  on  the  journals  of  shaftings  to 
notify  the  engineer  of  a  heated  bearing,  others  are  installed 
in  coal  bunkers  which  are  liable  to  catch  fire  through  spon- 
taneous combustion.  The  general  principle  of  the  alarm  is 
to  have  an  electrical  circuit,  which  is  susceptible  of  being 
closed  by  the  expansion  of  two  pieces  of  metal  in  the  presence 
of  heat.  To  be  effective  they  must  work  at  all  times  of  dan- 
ger, and  to  keep  them  in  working  condition  they  have  to  be 
subjected  to  periodic  inspection. 

In  large  risks,  it  is  not  advisable  to  depend  exclusively 
upon  automatic  signaling  devices.  Supplemental  protection 
is  afforded  by  human  watchmen  who,  from  the  standpoint  of 
efficiency,  may  prove  of  doubtful  value.    In  one  plant  an  old 


FIRE  PRECAUTION  151 

employee  was  given  such  a  place.  His  conception  of  the 
duties  of  the  position  was  to  stroll  around  the  building  Sev- 
eral times  during  the  early  evening.  By  ten  or  eleven  o'clock 
\ie  felt  assured  that  no  self-respecting  fire  would  intrude  any 
[ater,  so,  arranging  for  himself  a  comfortable  couch  he  spent 
the  remaining  watching  hours  in  sleep.  His  case  was  not  an 
uncommon  one,  and  insurance  companies  find  that  there  is 
only  one  means  of  making  watchmen  service  trustworthy, 
and  that  is  to  install  time-recording  devices  at  all  portions 
of  a  risk  where  inspection  should  be  made.  The  first  time- 
recording  clocks  installed,  were  put  in  for  the  purpose  of 
keeping  accurate  tab  on  the  fire  watchman.  If  a  watchman 
is  efficient  and  conscientious,  he  is  one  of  the  best  fire  pro- 
tective devices  known,  but  unless  he  is,  his  utility  is  uncer- 
tain. 

The  fire  watchman  usually  visits  both  the  inside  and  the 
outside  of  the  risk,  and  makes  a  connecting  link  between  the 
inside  and  outside  fire  protection.  Outside  fire  protection 
may  consist  of  automatic  sprinklers  located  over  windows  or 
other  openings.  It  may  be  a  device  which  will  send  a  cur- 
tain of  w^ater  over  an  exposed  wall.  In  general,  however,  the 
outside  protection  consists  in  placing  water  mains  and  fire 
plugs  or  hydrants  in  such  places  that  they  will  adequately 
cover  the  entire  risk.  Good  hose  should  be  kept  in  the 
vicinity  of  aU  fire  hydrants,  enclosed  in  such  a  way  that  it 
will  be  safe  from  the  weather  and  yet  be  quickly  available  in 
case  of  need.  The  watchman  should  be  quick  and  intelli- 
gent. He  should,  on  discovering  a  fire,  immediately  turn  in 
the  alarm  and  then  try  to  extinguish  the  flame.  The  effi- 
ciency of  the  outside  fire  protection,  aside  from  the  automatic 
devices,  depends  upon  three  things:  the  water  supply,  the 
effectiveness  of  the  watchman  and  firemen,  and  the  efficiency 
of  the  hose. 

Great  care  must  be  taken  of  fire  hose,  because  cheap  hose 
is  likely  to  break  at  the  most  critical  moment,  and  is  nevei 


152    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

dependable.  Fire  underwriters  and  insurance  companies  in- 
spect the  various  makes  of  hose  on  the  market.  On  good 
tried  material  they  set  their  stamp  of  approval,  so  that  no 
one  need  unwittingly  use  defective  material.  The  proper 
way  to  keep  the  hose  is  to  place  it  in  houses  installed  within 
the  vicinity  of  the  hydrants  or  fire  plugs.  Here  also  fire  un- 
derwriters make  it  easy  for  one  to  use  the  best  plans  because 
they  have  drawn  up  careful  specifications  for  hose  houses 

Many  plants  have  well-drilled  fire  companies  organized 
from  among  their  employees.  These  bodies  are  encouraged 
by  all  underwriters.  Some  insurance  companies  insist  upon 
frequent  unannounced  drills,  because  no  matter  how  good 
and  efficient  the  appliances  are,  they  may  prove  utterly 
worthless  in  the  hands  of  a  nerv^ous  or  incompetent  crew. 

Protection  to  property  is  important,  but  safety  to  life  is 
vital.  Fire  escapes  are  installed  for  the  purpose  of  provid- 
ing  sure  exits  to  the  employees  in  case  a  plant  becomes  ig 
nited.  Two  types  of  devices  are  common,  the  exterior  and 
interior  enclosed  fire  escapes.  The  former  is  an  iron  stainvay 
attached  to  the  outside  walls  of  the  building,  so  arranged  that 
easy  and  safe  exit  can  be  made  through  the  windows  and 
doors  of  every  floor.  The  latter  is  a  completely  enclosed 
shaft  running  the  entire  height  of  the  building.  (See  Fig. 
19,  FE.)  In  this  shaft  are  placed  the  stairways,  and  fre- 
quently the  passenger  elevator,  if  the  plant  possesses  one. 
Coimection  is  made  to  each  floor  by  means  of  an  iron  plat- 
form extending  from  a  door  on  the  outside  wall  of  the  shaft 
to  another  door  some  distance  away,  which  opens  into  the 
floor  of  the  building.  In  this  way  there  is  no  direct  connec- 
tion bet^^een  the  enclosed  shaft  and  the  building,  yet  there 
is  easy  communication  to  the  street  from  all  parts  of  tiie 
Btructure. 


CHAPTER  XI 
THE  BUILDING  AND  THE  WORKERS 

Man  is  like  other  animals — loeBt  results  require  pleasant, 
healthful  surroundings.  If  compelled  to  work  in  a  dark, 
cold,  or  repelling  environment,  his  output  will  suffer.  The 
comforts  within  the  building  and  a  spirit  of  hearty  coopera- 
tion among  all  the  departments  influence  the  physical  state 
and  mental  attitude  of  the  employees. 

Comforts  can  be  provided  when  the  building  ia  being 
erected  by  providing  for  five  things : 

1.  Abundant  light. 

2.  Sufficient  heat. 

3.  Good  ventilation. 

4.  Adequate  space  for  workers. 

5.  Convenient  toilet  and  wash  rooms. 

1.  Abundant  Light. — There  are  many  operations  in  al- 
most every  line  of  manufacturing,  for  which  abundant  light 
is  an  imperative  necessity.  Without  it  the  workmen  are 
hampered  in  their  activity  and  can  produce  neither  good 
work  nor  a  large  quantity.  If  a  plant  must  be  erected  on  a 
site  which  will  enclose  parts  of  the  building  in  more  or  less 
dark  corners,  the  managers  should  so  arrange  their  machinery 
that  those  which  require  the  greater  light  will  be  in  the  more 
desirable  sections. 

Before  the  time  of  the  steel  frame,  factoiy  buildings  had 
to  be  made  with  a  comparatively  small  amount  of  window 
space  in  order  to  give  proper  strength  to  the  structure;  and 
the  higher  the  building,  the  more  massive  had  to  be  the 
masonry  for  the  lower  stories.  Steel  structural  work  overlaid 
with  brick  made  possible  better  natural  lighting.     A  brick, 

153 


154    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

steel  frame  factory  building  can  allow  as  much  as  50  per  cent 
window  space  without  endangering  the  strength  of  the  struc- 
ture. Still  more  recently,  reinforced  concrete  has  been  used 
quite  extensively,  and  with  increasing  favor;  because  it  is  if 
anything  cheaper  than  the  steel  structure,  and  likewise  per- 
mits of  quite  as  much  window  space.      (See  Fig,  20.) 

The  old  style  machine  shops,  like  factory  buildings,  were 
very  deficient  in  window  space  compared  with  their  modem 
prototypes ;  but  sometimes  stupidity  will  do  much  to  make 
a  poorly  constructed  plant  even  worse.  In  a  shop  that  was 
not  by  any  means  ideally  lighted,  the  management  decided 
that  they  needed  some  more  storage  room  for  iron  plates  and 
other  hea^y  materials.  .They  appealed  to  the  city  councils 
to  have  the  street  closed,  which  separated  two  of  their  de- 
partments. ^Vhen  that  measure  was  put  through  they  erected 
a  shed  against  the  w^all  of  the  machine  shop  covering  nearly 
all  of  the  windows  of  one  side  of  the  building.  It  is  true 
that  the  shed  was  open  on  the  street  side,  but  its  long  slant- 
ing roof  covered  the  windows,  and  darkened  the  machine 
shop. 

The  two  methods  of  lighting  a  structure  are  by  windows 
from  the  side  or  from  the  roof.  Hoof  lighting  has  been  used 
for  many  years.  Fig.  21  illustrates  a  skylighted  room.  The 
objection  to  skylights  is  that  shops  thus  lighted  may  be  ex- 
ceedingly warm  on  account  of  the  direct  rays  of  the  sun.  If 
the  ceilings  are  high,  however,  the  discomfort  is  less,  al- 
though high  ceilings  will  not  obviate  the  unpleasant  results 
of  the  direct  rays  of  the  sun  completely. 

A  great  many  architects  have  adopted  the  scheme  of  light- 
ing their  buildings  from  the  top  by  means  of  the  saw-tooth 
roof.  The  saw-tooth  light  openings  are  usually  faced  to  the 
north.  In  this  way  the  light  is  admitted,  but  the  direct  rays 
of  the  sun  are  excluded  for  the  greater  portion  of  the  day. 
The  saw-tooth  window  is  not  strictly  a  skylight,  but  it  has 
ill  the  advantages  of  the  skylight  without  its  disadvantages. 


•3^,T3 


J=  a 


2c 


THE   BUILDING  AND   THE   WORKERS  155 

Light  should  be  provided  for  the  plant  by  day,  by  night, 
and  for  such  times  of  the  day  as  outside  light  is  inadequate 
for  the  work  in  hand.  A  great  many  methods  of  artificial 
lighting  are  advertised.  The  four  common  forms  of  electric 
lighting  are  the  flaming  arc  light,  the  mercury  lamp,  the 
common  incandescent  bulb,  and  the  ordinary  electric  arc. 
The  flaming  and  mercury  lamps  give  very  good  satisfaction, 
and  are  less  expensive  to  maintain  than  the  common  incan- 
descent and  arc  forms.  They  are,  however,  more  expensive 
to  install. 

The  artificial  light  in  any  plant  should  be  so  arranged 
that  the  worker  will  not  be  annoyed  by  any  flickering  or  un- 
evenness  of  the  light  nor  disturbed  by  the  casting  of  shadows. 
Two  great  objections  to  the  arc  light  are  its  shadows  and  its 
flickering.  The  incandescent  lamp  gives  a  steady  light,  but 
it  casts  shadows,  and  in  many  cases  is  not  powerful  enough 
to  give  thorough  satisfaction.  The  ideal  light  is  one  which 
most  nearly  approaches  daylight  in  its  intensity  and  diffuses 
the  rays  evenly  during  its  entire  time  of  running.  The  flam- 
ing arc  light  and  the  mercury  light  approach  these  ideals, 
and  in  general  make  a  superior  means  of  illumination. 

2.  Sufficient  Heat. — The  heating  of  buildings  has 
tested  the  ingenuity  of  engineers  and  owners  for  many  years. 
It  depends  of  course  very  largely  upon  the  type  of  manufac- 
turing that  goes  on  within  the  building,  to  what  extent  the 
various  departments  shall  be  heated.  A  foundry  or  black- 
smith shop  can  get  along  with  considerably  less  heat  than  a 
machine  shop  or  textile  mill.  In  any  case,  however,  it  is  a 
short-sighted  policy  for  the  management  of  a  plant  to  give 
its  workers  insufficient  heat.  The  amount  of  money  expended 
in  heating  a  plant  during  cold  weather  is  more  than  paid  for 
by  the  increased  capacity  of  the  workers. 

Several  means  of  heating  a  plant  may  be  installed : 

(1)  Hot  Air  from  Furnaces  Direct. — This  method  is 
little  employed  and  is  very  expensive  on  accoui^t  of  its  great 


156    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

wasting  of  fuel,  and  is  unsatisfactory  because  it  is  hard  to 
distribute  the  heat.  The  writer  knows  of  one  instance  where 
a  plant  was  heated  in  this  way  with  large  furnaces.  During 
cold  weather  it  was  almost  impossible  to  get  all  of  the  rooms 
comfortably  warm  during  the  entire  day.  The  workers  in 
the  poorly  heated  sections  would  sit  with  chilled  hands  try- 
ing to  perform  their  tasks,  but  their  best  efforts  were  ineffec- 
tive, and  during  and  after  cold  spells  the  operatives  would 
frequently  be  detained  at  home  to  nurse  colds  and  other 
maladies  resulting  from  their  exposure. 

(2)  Hot  Water. — Hot-water  systems  of  heating  are  eco- 
nomical in  small  plants.  They  have  objections  in  that  they 
do  not  aid  ventilation,  and  if  the  system  is  cooled  do^Ti  over- 
night, or  for  any  period  of  time,  it  requires  a  great  amount 
of  heat  and  a  considerable  length  of  time  to  get  the  system 
working  to  its  full  efficiency. 

(3)  Steam  Heating. — The  most  economical  and  generally 
used  system  of  heating  in  plants  and  workshops  is  to  utilize 
the  exhaust  steam  from  the  engine,  supplemented  by  live 
steam  from  the  boiler,  whenever  necessary.  Steam  heat  has 
the  advantage  of  being  easy  to  apply  at  any  point  by  the  mere 
insertion  of  a  coil  of  pipe.  The  objection  to  it  is  that  it  does 
not  actively  aid  ventilation;  but  under  the  best  of  condi- 
tions special  means  must  be  taken  to  properly  ventilate  a 
building  which  has  a  large  number  of  occupants.  Steam 
heating  is  much  more  quick  in  its  action  than  any  other  sys- 
tem, and  is  easily  handled. 

Aside  from  the  question  of  expense  the  ideal  system  of 
heating  is  one  which  works  hand  in  hand  with  the  ventilat- 
ing system.  Properly  handled,  the  combination  of  the  steam 
and  hot-air  systems  succeeds  in  doing  this.  A  scheme  that 
is  used  in  clubhouses,  hospitals,  and  other  institutions  of  a 
similar  public  character,  is  to  have  an  arrangement  something 
like  the  one  shown  in  Fig.  22.  The  steam  pipes  are  placed 
in  front  of  the  air  port.    The  cool  air  from  the  outside  enters 


158    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

the  port,  passes  through  the  filter  screen,  between  the  steam 
pipes,  and  from  thence  to  the  rooms. 

In  certain  plants,  like  textile  establishments,  it  is  neces- 
sary to  have  a  considerable  percentage  of  moisture  in  the  air 
in  order  to  get  the  best  results  in  working  the  fiber.  To  do 
this  humidifiers  may  be  placed  at  the  spray  chamber,  where 
water  is  sprayed  through  the  air,  giving  it  any  degree  of 
moisture  required,  and  then  the  moist  air  is  passed  to  the 
heating  coils.  This  scheme  heats  the  room  with  hot  air  by 
means  of  steam  pipes.  The  air  is  conducted  to  the  rooms  by 
flues  carefully  covered  to  prevent  the  radiation  of  heat  until 
it  reaches  the  room.  This  scheme  gives,  when  properly  run, 
an  ideal  system.  It  is,  however,  expensive  to  install  and  to 
maintain,  but  once  in  operation,  it  provides  not  only  for 
heating  but  also  for  air  circulation. 

A  cheaper  means  of  keeping  the  rooms  moist  in  textile 
plants  is  to  use  the  humidifiers  directly.  The  humidifier  is 
a  spraying  arrangement  located  at  various  parts  of  the  rooms, 
which  sends  forth  a  fine,  atomized  spray  of  water  or  steam  to 
the  degree  required  by  the  conditions  of  the  process. 

8.  Ventilation. — A  well-ventilated  room  should  be  free 
from  bad  air,  and  flying  particles  of  dust.  A  number  of 
devices  may  be  used,  the  most  common  of  which  is  to  open 
the  windows  at  the  top  and  bottom  at  various  places  through- 
out the  mill  or  factory.  This  scheme  is  unsatisfactory;  the 
change  of  air  is  too  slow.  If  ordinary  conditions  of  warmth 
are  to  be  maintained  during  cold  weather,  certain  portions 
of  the  room  get  too  much  air,  others  not  enough,  and  drafts 
are  liable  to  give  the  workers  colds. 

Proper  ventilation  in  grinding  rooms  and  in  special  places 
is  of  vital  importance  to  the  employees.  A  grinder's  life  is 
Comparatively  short,  even  under  the  best  conditions,  and 
various  states  have  passed  very  rigid  laws  regarding  the  in- 
stallation of  blowers  and  other  ventilating  apparatus.  The 
Blinois  law  for  1897  requires  that  hoods  and  hoppers  shall 


THE  BUILDING  AND  THE  WORKERS  159 

be  placed  over  grinding  wheels  in  order  to  catch  the  dust  and 
refuse,  which  must  be  drawn  away  by  a  current  of  air  to  the 
outside  of  the  building.  New  York,  Pennsylvania,  Ohio, 
Massachusetts,  and  all  of  the  industrial  states  have  similar 
laws. 

One  cannot  emphasize  too  much  the  advantage  of  abun- 
dant light,  adequate  heat,  and  good  ventilation.  It  has  a 
measurable  influence,  and  has  the  psychological  effect  of 
making  the  place  inviting.  One  can  hardly  appreciate  the 
full  significance  of  this  until  one  has  worked  in  different 
kinds  of  plants.  Where  conditions  are  unfavorable,  extra 
effort  must  be  made  to  do  the  work.  The  gloom  and  un- 
pleasantness of  the  surroundings  lowers  vitality,  and  makes 
both  men  and  officials  irascible  and  displeased  with  condi- 
tions. Little  annoyances  in  the  work  which  would  be  passed 
over  without  any  comment  whatever,  are  just  sufficient  to 
cause  loss  of  temper.  The  workmen  do  not  know  why  they 
feel  out  of  sorts,  but  they  feel  the  effects  of  these  surroundings. 

4.  Adequate  Space  for  the  Workers. — Workmen  must 
have  sufficient  space  in  which  to  perform  their  operations. 
A  floor  crowded  with  machinery  is  a  menace  to  their  safety. 
Every  machine  should  have  abundant  clearance  space  on  all 
sides,  so  that  the  pieces  can  be  handled  readily  and  with 
safety,  and  no  workman  should  be  so  placed  that  the  passing 
to  and  fro  of  anyone  will  distract  his  attention.  Everyone 
should  have  a  convenient  place  to  lay  his  tools  where  they 
will  not  be  interfered  with  by  his  fellows,  and  will  not  annoy 
anyone  in  his  vicinity.  No  exact  rule  can  be  established  as 
to  the  amount  of  space  that  should  be  allotted  to  each  man. 
There  ought  to  be  no  undue  crowding.  No  one  likes  to  feel 
that  he  is  in  any  way  an  annoyance  to  those  around  him. 
If  one  has  room  enough  so  that  he  caimot  reasonably  feel  an- 
noyed at  the  presence  of  those  around  him,  and  can  perform 
his  work  with  safety  to  himself  and  his  neighbors,  he  haa 
sufficient  space  in  the  true  sense  of  the  word. 
13 


160    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

5.  CoN^rENiENT  Toilet  and  Wash  Rooms. — Every  plant, 
whether  engaging  women  or  men,  should  provide  the  em- 
ployees with  convenient  facilities  for  washing  their  hands 
and  faces,  and  for  disposing  of  their  clothing  while  they  are 
at  work.  Personal  experience  proves  that  the  actual  amount 
of  money  saved  by  offering  decent  facilities  more  than  makes 
up  the  interest  on  the  capital  expended  in  the  installation  of 
conveniences.  No  desirable  workman,  no  self-respecting  girl, 
cares  to  go  through  the  streets  laden  with  the  dirt  and  grime 
of  his  or  her  occupation,  or  in  shop  clothing  if  there  is  any 
distance  to  go  and  the  work  is  of  an  unpleasant  nature.  The 
manufacturer  might  as  well  recognize  first  as  last  that  good 
employees  are  self-respecting  ones,  and  that  self-respecting 
people  give  attention  to  their  personal  appearance.  If  wash- 
ing facilities  are  not  provided,  employees  will  provide  sub- 
stitutes, and  will  steal  an  unnecessary  amount  of  time  to  com- 
plete their  ablutions  by  stealth.  Foremen  very  often  quietly 
permit  such  breaches  of  discipline,  if  they  are  not  too  flagrant, 
because  it  is  so  exceedingly  difiicult  to  correct  the  abuse  in 
the  absence  of  any  regularly  j)rovided  place.  If  wash-rooms 
are  provided  for  all,  no  one  need  take  any  minutes  during 
the  working  day  to  secure  water  in  his  private  bucket.  If, 
in  addition  to  wash-rooms,  individual  lockers  for  the  em- 
ployees' clothing  are  installed  within  those  apartments  set 
aside  for  washing,  decisive  action  can  be  consistently  taken 
to  prevent  time  stealing;  because  foremen  will  have  no  ex- 
cuse for  permitting  any  laxness  of  discipline.  If  the  wash- 
rooms are  kept  closed  until  quitting  time,  so  that  no  one  can 
get  to  his  clothing  until  he  is  entitled  to  leave,  there  will  be 
no  object  in  stealing  time. 

To  what  extent  should  an  employer  interest  himself  in 
caring  for  his  employees?  Should  a  concern  invest  money 
to  provide  dinners  and  other  comforts  for  the  men  at  a  low 
rate  or  at  cost?  In  the  writer's  opinion,  the  question  to  what 
extent  welfajre  work  should  be  carried  on  depends  entirely 


THE   BUILDING  AND   THE   WORKERS  161 

upon  what  the  plant  is  manufacturing  and  its  class  of  work- 
ers. A  concern  which  manufactures  a  class  of  material  re- 
quiring the  employment  of  cheap  labor  will  find  it  question- 
able economy  to  make  investments  of  this  character.  Poorly 
paid  workmen  are,  as  a  rule,  ignorant.  They  cannot  afford 
to  pay  a  sufficient  price  for  their  meals  to  make  restaurants 
profitable  investments  for  employers.  It  is  also  a  question- 
able policy  to  give  things  to  workmen  for  less  than  they  cost, 
because  by  so  doing  the  firm  is  making  an  open  confession 
that  it  is  either  overcharging  the  public  for  its  goods,  or  un- 
derpaying the  men,  and  there  is  distinct  danger  that  the  firm 
will  undertake  duties  belonging  to  the  community  at  large 
rather  than  to  the  company. 

If  a  firm  employs  a  class  of  labor  whose  patronage  will 
make  a  restaurant  and  other  activities  a  burdenless  or  profit- 
able enterprise  for  the  firm,  the  management  might  well  con- 
sider the  installation  of  such  service. 

There  are  concerns  in  this  country  which  give  themselves 
a  great  deal  of  free  advertising  by  letting  the  public  know 
how  well  they  treat  their  employees.  Certain  health-food 
concerns  are  open  for  inspection  the  year  round,  and  the  in- 
terested spectator  will  be  shown  the  generous  favors  that  are 
showered  upon  the  employees.  Concerns  of  this  character 
are  in  a  distinctively  different  class  than  the  ordinary  com- 
petitive business.  They  can  afford  to  carry  on  their  philan- 
thropies because  the  public  pays  for  them.  If  one  cares  to 
do  a  little  mental  arithmetic  he  can  prove  it  for  himself. 
There  are  two  very  widely  advertised  articles  on  the  market, 
one  of  which  gives  less  than  a  pound — to  be  exact,  14  ounces 
— of  wheat  in  a  certain  product  which  is  sold  retail  at  twelve 
cents  per  package.  If  we  count  196  pounds  of  grain  to  the 
barrel  and  imagine  that  all  the  wheat  ground  goes  into  the 
flour,  which  is  far  from  true,  we  find  that  a  barrel  of  flour 
costs  the  consumers  of  that  food  about  $25.  Another  concern 
gives  seven  ounces  of  grain  for  ten  cents,  making  it  on  the 


162    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

flour  basis  worth  about  $50  per  barrel.  Selling  their  prod- 
ucts at  such  famine  prices,  of  course  such  concerns  can  afford 
to  pose  as  philanthro^jists,  but  a  machine  shop,  textile  estab- 
lishment, or  other  competitive  business  simply  cannot  do  it. 
It  neither  pays  as  advertising  nor  in  increased  output  on  the 
part  of  the  workers. 

Intelligent  workmen  as  a  class  are  not  unreasonable.  They 
want  fair  treatment  and  like  to  be  put  into  surroundings 
where  they  can  respect  themselves.  They  do  not  desire  to  be 
made  objects  of  charity.  They  do  appreciate  efforts  on  the 
part  of  the  management  to  get  into  close  touch  with  them, 
they  do  like  to  work  in  pleasant  surroundings,  and  are  grate- 
ful to  the  firm  that  brings  them  into  a  better  and  closer  un- 
derstanding with  fellow  workers  and  employers.  Man  is  a 
social  animal,  and  prefers  to  work  in  a  place  where  there  is 
good  fellowship;  but  there  is  a  distinct  line  to  be  drawn 
between  efforts  which  really  cost  the  employer  nothing  and 
do  not  lower  the  workman's  self-respect  in  accepting  them, 
and  the  other  kind  which  makes  the  employee  conscious  of  a 
condescension  on  the  part  of  the  giver. 


CHAPTER  Xn 
THE   POWER   PROBLEM 

Power  is  one  of  the  prime  causes  determining  the  loca- 
tion of  industries.  Certain  districts  in  the  United  States 
afford  unusual  manufacturing  opportunities  because  of  the 
presence  of  falling  bodies  of  water.  A  waterfall  is  the  cheap- 
est known  form  of  energy.  That  does  not  necessarily  mean 
that  it  will  give  the  cheapest  power  to  a  prospective  manu- 
facturer. A  high  drop  and  a  great  mass  of  water  are  merely 
the  raw  materials  from  which  to  obtain  energy  to  turn  the 
wheels  of  a  factory.  A  thing  is  cheap  only  when  a  small 
expenditure  of  money  puts  it  into  consumable  form. 

To  convert  the  wasting  energy  of  a  roaring  cataract  into 
productive  income  requires  investments  in  several  things. 

1.  Land  Around  the  Falls. — The  people  who  desire  to 
use  the  waterfall  must  secure  the  land  on  both  sides  of  the 
falls  before  they  have  a  clear  title  to  use  the  power;  and,  if 
the  stream  is  navigable,  further  permission  from  the  state 
and  federal  authorities  must  be  obtained. 

So  far  as  purely  engineering  considerations  are  concerned, 
water-power  equipment  demands : 

(a)  Space  for  a  dam  or  reservoir  for  storing  the  water,  in 
•almost  every  case.     At  Niagara  Falls  and  some  other  places 

a  dam  is  unnecessary,  but  such  conditions  are  exceptions  to 
the  general  rule. 

(b)  Power-house  site. 

(c)  A  canal  or  trench  to  conduct  the  water  from  the  river 
above  the  falls  through  the  turbine  to  the  stream  below  the 
falls. 

163 


164    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

In  many  cases  where  a  dam  is  necessary  no  land  is  needed 
for  the  site  of  the  power  house,  the  penstock,  and  flumes. 
It  depends  very  largely  upon  the  type  of  plant  that  is  to  be 
built  and  the  nature  of  the  falls  as  to  how  much  land  is  ac- 
tually necessary;  but  some  must  be  purchased  in  any  event, 
and  it  frequently  happens  that  the  amount  is  quite  consid- 
erable. 

2.  The  second  item  of  investment  is  the  hydraulic  ma- 
cliinery. 

The  main  parts  of  the  water-power  equipment  for  a  water 
turbine  usually  consist  of  a  dam  which  may  cost  thousands 
of  dollars,  a  long  tube  called  the  penstock  or  down  flume, 
which  leads  the  water  from  the  head  race  to  the  turbine,  the 
turbine  itself,  and  the  draft  tube  or  draw  pipe  which  con- 
nects the  turbine  with  the  tail  race.  A  penstock  iu  not  always 
a  necessary  part  of  the  water-power  plant,  however,  as  it  may 
be  part  of  the  dam ;  and,  if  instead  of  a  turbine  the  hydraulic 
engine  happens  to  be  an  impulse  wheel,  there  is  no  draft  tube. 

After  the  power  has  been  generated  it  must  be  trans- 
mitted. If  the  turbines  cannot  be  directly  connected  to  the 
machinery,  the  manufacturer  must  invest  in  expensive  elec- 
trical equipment  to  carry  the  power  to  his  plant. 

In  spite  of  these  necessary  investments  water  power  has  a 
number  of  advantages  over  any  other  form  of  energy.  It  is 
cheap  to  produce,  because  it  requires  neither  the  purchase  nor 
handling  of  fuel.  The  mechanism  is  simple  and  can  be  kept 
in  running  order  by  a  smaller  number  of  people  than  is  neces- 
sary in  a  steam  plant.  No  space  is  taken  up  by  boiler  plants 
or  by  storage  houses  for  fuel  and  ashes.  Water  power  is 
naturally  clean.  There  are  no  smoke  ordinances  to  fear  nor 
ashes  to  handle. 

Its  disadvantages,  while  few,  are  sometimes  important. 
A  heavy  investment  may  be  necessary  before  it  is  possible  to 
utilize  the  falls.  Frequently  the  manufacturer  will  require 
ao  little  power  that  it  is  not  worth  his  while  to  make  an  in- 


THE  POWER  PROBLEM  165 

vestment  which  will  utilize  even  a  small  fraction  of  the  cas- 
cade. Unless  one  wants  to  consume  a  fairly  large  amount  of 
energy,  the  force  of  falling  water  is  not  cheap  in  spite  of  the 
fact  that  in  large  quantities  it  is  possibly  the  least  expensive 
power  generated.  This  accounts  for  the  fact  that  in  the 
vicinity  of  a  great  many  of  the  larger  falls  throughout  the 
country,  large  power  plants  have  been  installed  which  manu- 
facture power  for  sale.  Small  manufacturers  may  find  it 
profitable  to  purchase  power  as  needed.  The  advantages  of 
purchasing  power  are  considerable.  Buyers  are  relieved  of 
the  necessity  of  securing  the  water  rights,  they  need  burden 
themselves  neither  with  interest  charges  on  the  investments 
in  power  plant  and  transmitting  equipment,  nor  with  sal- 
aries to  power-generating  employees,  nor  with  expenses  for 
repairs  or  maintenance ;  and  portions  of  the  buildings  which 
would  otherwise  be  taken  up  by  a  private  power  plant  can  be 
devoted  to  manufacturing. 

If  a  small  manufacturer  can  agree  not  to  call  for  a  great 
amount  of  power  during  the  time  the  power  plant  has  its 
peak  or  heavy  loads,  very  low  terms  may  be  obtained.  The 
power  houses  find  it  highly  advantageous  to  keep  a  constant 
load  on  their  machinery,  and  in  order  to  induce  people  to 
distribute  their  consumption,  they  will  make  considerable 
concessions  to  those  who  are  willing  to  agree  to  use  power 
when  the  burden  on  the  power  house  would  otherwise  be 
light.  Even  if  a  plant  cannot  adjust  its  power  consumption 
so  that  it  can  get  these  very  low  rates,  it  may  still  be  profit- 
able to  purchase  power.  In  such  cases,  however,  the  pur- 
chaser of  power  should  take  precautions  to  guarantee  to 
himself  a  constant  supply  at  all  times. 

Ordinarily,  conditions  are  such  that  a  manufacturer  can 
neither  use  a  waterfall  nor  purchase  his  motive  force.  He 
must  transform  the  lowest  known  form  of  energy,  heat,  into 
power. 

Two  types  of  heat  engines  ?ire  known,  the  direct  comhuft- 


166    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

tion,  represented  by  gas,  gasoline,  and  oil  units,  and  the  in- 
direct combustion,  or  steam  generator.  Tlie  essential  differ- 
ence between  the  two  great  classes  of  energy  transformers  is 
that  in  the  former  case  the  fuel  is  directly  introduced  into 
the  cylinder  and  tliere  exploded  by  a  spark  or  flame  causing 
consequent  expansion  of  the  gases  so  generated  and  heated. 
In  the  latter,  the  fuel  first  converts  water  into  gas  under  pres- 
sure, and  then  utilizes  the  expansive  force  of  the  steam  to 
convert  the  heat  units  into  mechanical  energy. 

If  a  plant  is  small,  the  gasoline  engine  is  an  exceedingly 
cheap  power  generator,  and  the  probabilities  are  that  this 
engine  will  become  much  more  popular  than  it  is  even  now. 
The  gasoline  engine  is  cheap  to  install  and  easy  to  run,  al- 
though the  fuel  is  somewhat  dangerous  to  handle,  and  insur- 
ance companies  are  inclined  to  look  upon  it  with  disfavor. 

Within  recent  years,  the  gas  engine  has  become  an  ex- 
ceedingly popular  form  of  motive  power.  Two  general  kinds 
are  in  use,  those  which  utilize  the  ordinary  gas  from  street 
mains,  and  those  which  consume  producer  gas.  The  former 
engine  was  the  first  used,  and  is  very  popular  with  small 
manufacturers.  It  is  easy  to  install,  it  being  necessary  only 
to  mount  the  engine  on  a  small  base,  and  to  make  proper 
connections  with  the  gas  supply;  no  ground  space  is  required 
for  a  boiler,  no  chimney  is  needed,  nor  is  it  necessary  to 
store  fuel.  There  are  no  boiler  repairs,  no  handling  of  ashes, 
and  the  cost  of  maintenance  and  attendance  is  low.  The 
objections  to  the  engines  are  their  noise,  bad  odor,  and,  if 
the  price  of  gas  is  high,  their  excessive  fuel  cost. 

At  one  time,  all  gas  engines  were  run  from  the  town 
lighting  supply,  and  the  owner  of  the  engine  had  to  pay  the 
full  domestic  rate  for  his  power  fuel.  This,  of  course,  makes 
the  gas  engine  an  expensive  apparatus  if  the  amount  of  horse 
power  consumed  exceeds  twenty  or  thirty  horse  power.  In 
some  sections  of  this  country  where  natural  gas  is  used,  the 
aid  style  gas  engine  is  still  the  most  profitable  form  of  power 


THE  POWER  PROBLEM  167 

for  a  moderate  sized  factory.  The  city  of  Columbus,  Ohio, 
for  instance,  supplies  natural  gas  for  power  purposes  at  a 
rate  as  low  as  ten  cents  per  thousand  cubic  feet;  and  in  that 
locality  the  gas  engine  is  a  very  popular  means  of  power 
generation.  Cheap  gas  is  hard  to  get  from  ordinary  town 
supplies.  If  a  manufacturer  is  to  use  more  than  twenty  to 
thirty  horse  power  his  gas  engine  becomes  an  expensive  in- 
strument with  such  a  source  of  fuel. 

Chemists  for  a  long  time  bent  their  energies  toward  the 
securing  of  a  cheaper  form  of  gas  directly  from  the  coal,  and 
the  results  of  their  investigations  developed  that  a  cheap  gas 
could  be  obtained  in  the  form  of  producer  gas.  Engineers 
have  also  been  able  to  design  engines  w^hich  can  utilize  this 
kind  of  fuel.  Technically,  producer  gas  is  understood  to  mean 
the  gas  obtained  by  the  partial  combustion  of  fuel  in  a  gas 
producer.  The  ordinary  producer  gas  is  usually  made  by 
driving  air  with  or  without  the  addition  of  steam  or  water 
vapor  through  a  deep  bed  of  incandescent  fuel  in  a  closed 
producer.  Such  gas  is  very  poor  for  illuminating  and  heat- 
ing purposes.  According  to  one  authority  the  calorific  power 
of  one  cubic  meter  of  an  average  sample  of  semi-water  gas  is 
1,432  calories,  while  the  same  amount  of  ordinary  sixteen 
candle-power  illuminating  gas  is  5,693  calories.^  Improve- 
ments have  been  carried  on  in  making  and  using  this  pro- 
ducer gas  so  that  at  the  present  time  the  producer  gas  engine 
is  a  serious  rival  to  the  steam  engine  for  both  small  and 
large  units. 

Wherever  gas  is  produced  as  a  by-product,  the  gas  engine 
is  superior  to  the  steam  engine.  Within  the  past  few  years, 
steel  plants  and  other  establishments,  which  in  the  course  of 
their  work  develop  gas,  have  found  the  gas  engine  the  cheap- 
est form  of  power  in  existence.     The  Gary  Steel  plant  in  its 

*  "Producer  Gas,''  by  J.  Enjerson  Dowson  and  A.  T.  Larter, 
5.99. 


168    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

power  houses  has  adopted  the  gas  engine.  Their  electric 
power  station  is  equipped  entirely  with  gas  engines  as  the 
prime  movers.  Their  blowing  engines  are  likewise  gaa 
driven. 

Some  of  the  recent  gas  engines  are  as  large  a^  2,000  H.  P., 
and  on  the  continent  of  Europe  there  are  twin  tiindem  en- 
gines which  develop  over  4,000  H.  P.*  Although  the  large 
gas  engine  is  in  its  infancy,  it  is  demonstrating  an  efficiency 
which  in  the  near  future  will  give  it  first  place  among  the 
economical  heat  engines.  In  the  first  place,  by  using  the 
gas  directly  in  its  cylinders  it  saves  a  great  deal  more  heat 
than  does  the  most  economical  steam  engine,  because  the 
latter  must  bum  the  gas  under  boilers  and  then  utilize  the 
steam.  A  gas-engine  plant  takes  up  about  one  half  to  two 
thirds  the  space  necessary  for  a  steam  plant,  which  uses  the 
most  compact  type  of  steam  engine.  The  large  imit  gas  en- 
gines, however,  are  economical  only  where  the  gas  is  devel- 
oped as  a  by-product  in  some  other  part  of  the  plant.  Under 
these  conditions,  it  is  cheaper  to  bum  the  gas  directly  in  the 
engine  than  it  is  to  transform  its  heat  energy  into  steam  and 
thence  into  mechanical  power.  If,  however,  the  plant  does 
not  produce  gas  incident^illy  to  its  other  manufacturing 
work,  or  if  the  plant  needs  a  boiler  for  heating,  it  is  ques- 
tionable whether  steam  power  is  not  the  more  economical. 

Two  types  of  steam  engines  may  be  considered,  the  re- 
ciprocating steam  engine  and  the  turbine.  The  reciprocating 
steam  engine  attained  a  high  stage  of  development  years  be- 
fore the  turbine  engine  was  even  regarded  as  a  commercial 
possibility. 

The  steam  turbine  has,  however,  now  demonstrated  its 
efficiency,  and  in  time  it  will  probably  displace  the  recipro- 
cating engine.     It  may,  for  a  while,  dispute  the  field  with 

^Cf.  Cassier's  Magazine,  July,  19Q9,  "Recent  Pevelopments  in 
liarge  Gas-En^ne  Design." 


THE  POWER  PROBLEM  169 

the  gas  engine.     The  steam  turbine  possesses  the  following 
advantages : 

1.  It  makes  a  great  initial  saving  in  foundation  costs. 

2.  Compared  with  the  reciprocating  engine  it  requires 
small  floor  space. 

3.  Its  oil  consumption  is  very  low,  and  as  no  oil  is  con- 
sumed in  the  cylinders,  the  condensing  water  may  be  used 
directly  in  the  boiler. 

Its  disadvantages,  as  compared  with  the  reciprocating 
engine,  are  as  follows: 

1.  The  first  cost  of  engine  is  greater  for  equivalent  horse 
power. 

2.  If  it  does  not  operate  with  a  condensing  plant,  it  is 
wasteful  in  power. 

3.  The  condensing  plant  necessary  for  a  turbine  is  more 
expensive  than  that  required  for  a  reciprocating  engine. 

4.  Its  high  speed  makes  it  disadvantageous  for  direct 
connection  with  certain  electrical  generators,  and  high  speed 
seems  as  yet  to  be  necessary  to  develop  the  greatest  economy 
in  the  turbine. 

An  economical  steam  plant,  whether  it  be  reciprocating 
or  turbine,  has  a  large  number  of  subsidiary  appliances  to 
reduce  power  cost.  Three  kinds  of  economies  may  be  intro' 
duced  into  the  steam  plant. 

1.  Those  which  make  the  water  more  suitable  for  steam 
purposes. 

2.  Those  which  make  the  boiler  and  furnace  more  effi- 
cient. 

3.  Those  which  make  the  engine  more  efficient. 

Water  contains  either  organic  or  inorganic  impurities 
held  in  suspension  or  in  solution.  If  they  are  suspended 
impurities,  they  can  be  removed  readily  by  a  filtering  pro- 
cess. If,  however,  the  impurities  are  soluble,  complications 
arise  in  handling  the  water  question. 

The  common  and  most  undesirable  impurities  found  in 


170    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

water  are  inorganic,  and  may  either  corrode  the  inside  shell 
of  the  boiler  or  cause  a  non-conducting  scale  to  form  over 
the  tubes.  In  some  cases  the  impurities  will  do  both.  The 
corroding  impurities  are  sulphuric,  hydrochloric,  carbonic, 
acetic,  and  tannic  acids.  Those  which  corrode  and  form  a 
scale  are  iron  sulphate  and  magnesium  chloride.  The  scale- 
forming  impurities  are  the  carl3onates  and  sulphates  of  lime 
and  magnesia  and  carbonate  of  iron.  The  third  class  of  im- 
purities is  the  most  hamiful  to  the  boiler,  because  the  scale 
formed  within  the  boiler  puts  a  sheet  of  non-conducting 
material  between  the  plates  of  the  boiler  and  the  fire.  This 
sheet  shortens  the  life  of  the  boiler,  causing  the  insulated 
plates  near  the  intense  heat  to  become  soft  and  bend  and 
blister  under  the  intense  pressure  on  the  inside  of  the  boiler. 
In  fact,  it  may  hajspen  tliat  the  scale  may  develop  so  great  a 
weakness  as  to  cause  the  boiler  to  explode. 

Three  methods  may  be  taken  to  extract  these  impurities 
from  the  water.  The  first,  the  cheapest  and  a  much  used 
plan,  which  is  probably  at  the  same  time  the  least  effective, 
is  to  boil  the  water  before  it  enters  the  boiler  either  by  using 
the  exliaust  steam  from  the  engine  or  by  some  other  device. 
This  will  drive  out  carbonic  acid  and  tends  to  precipitate  the 
carbonates,  but  unfortunately  the  boiling  process  is  not  con- 
tinued long  enough,  nor  can  it  be  conducted  under  the  boiler 
pressure,  hence  the  action  is  incomplete,  and  a  small  per- 
centage of  the  impurities  is  removed.* 

Another  method  is  to  introduce  some  precipitating  com- 
pounds into  the  boiler.  If  tri-sodium  phosphate  or  sodimn 
fluoride  be  introduced,  the  heated  water  will  have  precipi- 
tated from  it  both  the  carbonates  and  the  sulphates  of  lime 
and  magnesia  as  phosphates  or  fluorides.     These  do  not 


iCf.  Cassier's  Magazine,  April,  1904,  Vol.  XXV,  p.  507,  "Soft- 
ening and  Purifying  Waters  for  Boilers,"  by  J.  C.  W.  Greth, 
pp.  50&-514. 


THE  POWER  PROBLEM 


171 


harden  in  the  shell  or  fuse,  but  they  are  objectionable  be- 
cause the  precipitation  is  expensive,  and  because  heat  is 
wasted  in  raising  tlie  temperature  of  the  resulting  sludge.^ 


By  courtesy  of  Dodge  Manufacturing  Co.,  Mishawaka,  Indiana, 

Fig.  23.— Inside  View  of  the  Eureka  Water  Softener. 

The  third  and  most  effective  scheme  is  to  remove  the  im- 
purities from  the  water  by  precipitation  before  they  enter 

^Cf.  Gassier' 9  Magazine,  April,  1904,  Vol.  XXV,  p.  508. 


172    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

the  boiler.  The  best  precipitation  agents  known  are  lime  and 
Boda.  The  lime  precipitates  carbonates,  the  soda  sulphates 
and  chlorides.     The  soda  also  tends  to  neutralize  any  acids.  ^ 

The  inside  of  an  effective  water  softener  is  shown  in  Fig. 
28.  The  raw  water  enters  and  falls  on  the  wheel  E,  causing 
it  to  revolve,  thus  making  all  the  power  necessary  to  actuate 
the  softener.  A  portion  of  the  raw  water  is  diverted  from 
this  first  receiving  tank  to  saturator  J",  where  a  clear  lime 
solution  of  constant  strength  is  manufactured.  U  shows  the 
flush  valve  for  the  lime  tank.  G  contains  the  soda.  The 
water  passes  down  through  the  center  tube  M  after  coming 
in  contact  with  the  chemicals,  and  gradually  works  up  past 
the  series  of  spiral  plates  JSf.  These  plates  accelerate  the  sep- 
aration of  the  precipitated  impurities  P  as  the  water  travels 
upwards.  The  impurities  collect  as  a  sludge  in  S,  while  the 
pure  water,  after  it  passes  through  the  wood-fiber  filter  A,  is 
collected  in  the  reservoir  Y,  where  it  is  drawn  off  to  a  stor- 
age tank  or  for  use. 

The  Engineering  Magazine  gives  a  number  of  tallies  from 
which  the  following  is  quoted.  2 

"A  5,000  horse-power  boiler  plant  located  on  the  bank  of  a  river 
and  buying  city  water.  The  plant  is  a  power  station  of  a  large 
street  railway  system.  The  statement  is  taken  from  the  power 
house  record  for  the  month  of  March,  1905,  and  for  the  same  month 
of  the  year  1906.  The  engines  in  this  plant  are  run  surface- 
condensing.  When  the  boiler  was  fed  with  this  condensed  steam 
and  city  water  for  make-up,  it  was  found  necessary  to  use  a  high 
grade  mineral  oil  for  the  cylinders,  because  the  removal  of  oil  by 
skimming  devices  from  the  condensed  steam  (in  order  to  fit  the 
latter  for  boiler  feed)  is  more  completely  affected  with  pure  min- 
eral oil  than  with  an  emulsifying  mixture  containing  animal  or 
vegetable  oil.  This  will  explain  the  decided  drop  in  the  cost  of 
oil  per  month. 

>  Cf.  Cassier's  Magazine,  April,  1904,  Vol.  XXV,  p.  509. 
^Engineering  Magazine,  March,  1908,   "Water  for  Economical 
Steam  Generation,"  by  J.  C.  William  Greth,  pp.  945,  946. 


THE  POWER  PROBLEM  173 


SAVINGS   EFFECTED    OPERATING   WITH   WATER- 
SOFTENING   SYSTEM 

Boiler  Room  Labor  Saving $    9.30 

Boiler  Repairs  Saving 24.21 

Oil  and  Grease 204.87 

Water 59.46 

Fuel,  154  tons  at  $1.59  per  ton 244.86 

$542.70 

Cost  of  purifying  water $35.25 

Depreciation  charge  per  month  at  rate  of  10  per  cent 

on  $7,000 58.33 

Interest  charge  per  month  at  rate  of  6  per  cent  on 

$7,000 35.00      128.58 

Savings  effected  per  month $414.12 

Savings  effected  per  year 4,969.44 

Or  almost  71  per  cent  on  an  investment  of  $7,000." 

After  the  water  lias  been  purified,  the  boiler  plant  uses 
other  schemes  to  increase  economies.  One  is  to  heat  the 
water  before  it  enters  the  boiler.  It  is  a  well-known  fact 
in  engineering  practice  that  the  more  heat  the  water  con- 
tains before  it  enters  the  boiler,  up  to  about  the  boiling 
temperature,  the  greater  will  be  the  saving  in  fuel  to  raise 
the  water  to  the  boiling  temperature. 

"There  is  no  great  advantage  in  the  introduction  of  feed  water 
at  the  steam  temperature,  because  such  a  temperature  cannot  be 
gained  without  an  economic  loss,  either  in  flue  gases  or  in  steam 
used  for  the  purpose ;  and,  second,  a  moderate  difference  in  tem- 
perature increases  the  effectiveness  of  heat  transfer  and  promotes 
circulation."  ^ 

To  introduce  water  at  the  economic  temperature,  several 
schemes  are  used.  One  practice  is  to  introduce  coils  of  pipe 
into  the  flues  and  chimney  of  the  boiler  plant  and  to  have 

^Engineering  Magazine,  March,  1908,  Vol.  XXXIV,  p.  955, 
"The  Argument  for  the  Open  Feed  Heater,"  by  Reginald  Pelham 
Bolton. 


174   THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

the  water  heated  on  its  way  to  the  boiler  by  waste  gases  of 
the  furnace.  This  scheme  is  called  the  Economizer  System. 
In  installing  an  economizer,  care  must  be  taken  not  to  intro- 
duce too  many  coils  of  pipe  in  order  to  get  all  of  the  heat 
out  of  the  gases,  because  if  the  economy  is  carried  too  far, 
there  will  not  be  sufficient  heat  left  in  the  gases  to  make  a 
draft  for  the  furnace.  On  this  account,  the  economizer  can 
be  used  with  profit  only  in  very  highly  organized  plants, 
which  have  the  most  expensive  engines  and  all  the  accom- 
panying refinements. 

A  more  common  and  more  profitable  scheme  for  heating 
the  feed  water  for  the  boiler  is  to  utilize  the  exhaust  steam 
from  the  engine  as  a  heating  agent.  There  are  many  varie- 
ties of  exhaust  heaters  on  the  market,  but  the  general  princi- 
ple is  the  same. 

Within  recent  years  much  attention  has  been  devoted  to 
the  heating  of  the  steam  after  it  leaves  the  boiler,  in  order  to 
extract  all  the  moisture  from  it,  thus  making  it  more  expan- 
sive and  effective  in  the  cylinder  of  the  engine.  The  heating 
of  the  steam,  after  it  leaves  the  boiler  and  before  it  enters  the 
cylinder,  is  called  superheating.  Superheated  steam  makes  a 
saving,  because  in  passing  through  the  cylinder  it  does  not 
leave  any  moisture  in  the  walls  of  the  cylinder  to  reduce  the 
temperature  of  the  incoming  live  steam. 

In  considering  the  adoption  of  superheating,  the  added 
interest  on  investment,  the  repair  costs,  and  depreciation 
must  be  balanced  against  the  coal  saving  resulting  from  the 
superheater. 

An  incidental  objection  to  the  superheater  is  that  the  in- 
tense heat  of  the  steam  destroys  the  lubricating  qualities  of 
the  oil  introduced  into  the  cylinder,  but  that  difficulty  may 
be  overcome  to  some  extent  by  using  a  dry  lubricant. 

Another  boiler-room  saving  device  is  the  automatic  stoker, 
of  which  there  are  many  types  and  forms.  Three  main  types 
may  be  noted :  the  chain,  the  plunger,  and  the  rocking  grate. 


THE  POWER  PROBLEM  175 

The  chain  stoker  consists  of  a  revolving  chain  grate  on  which 
coal  is  dropped  and  consumed  as  it  passes  under  the  boiler. 
By  the  time  it  gets  to  the  end  of  its  journey,  the  fuel  is  ash, 
and  is  dropped  into  the  ash  pit.  In  the  plunger  type  the 
coal  is  forced  by  means  of  a  plunger  gradually  across  the 
grate  bars,  until  it  is  pushed  over  the  end  of  the  fire  box  in 
the  form  of  consumed  fuel.  In  the  rocking  grate  stoker,  coal 
is  dropped  on  a  series  of  grate  bars  which  are  inclined  toward 
the  ash  pit  and  have  an  oscillating  motion.  The  coal  soon 
becomes  ignited  and  the  moving  bars  gradually  work  it  to- 
ward the  ash  pit,  so  that  by  the  time  the  fuel  has  exhausted 
its  heat-giving  qualities  its  ashes  are  ready  to  be  carried 
away. 

The  automatic  stoker  makes  several  very  important  sav- 
ings. It  reduces  the  boiler-room  labor,  gives  greater  uniform- 
ity in  firing,  and  makes  combustion  more  complete.  The 
automatic  stoker  often  makes  it  possible  for  one  to  use  an 
inferior  grade  of  fuel  under  the  boilers.  With  the  automatic 
stoker  have  been  introduced  great  improvements  in  the  han- 
dling of  coal  and  ashes  by  machinery.  Large  plants  have 
for  a  number  of  years  found  these  innovations  decidedly  pay- 
ing investments,  and  now  small  plants  are  also  finding  them 
profitable.  They  are  tried  and  tested  devices,  and  have 
gained  for  themselves  assured  standing  in  boiler  equipment. 

All  the  economizers  for  the  steam  engine  above  noted, 
however,  give  place  in  importance  to  the  oldest  saving  appa- 
ratus known,  the  condenser,  a  device  designed  to  enable  the 
engine  to  utilize  all  the  steam  pressure  generated  in  the 
boiler.  The  atmosphere  exerts  a  fifteen-pound  pressure  to 
tlie  square  inch.  If  steam  exliausts  from  the  cylinder  into 
the  open  air,  this  pressure  will  be  exerted  on  every  inch  of 
the  side  of  the  piston,  which  is  pushing  out  the  expanded 
steam.  To  eliminate  this  back  pressure,  which  may  retard 
the  efficiency  of  the  engine  from  eight  to  fifteen  or  more  per 
cent,  the  steam  is  exhausted  into  a  space  which  is  kept  as 
13 


176    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

nearly  vacuum  as  possible.  The  partial  vacuum  is  ol> 
tained  by  attaching  the  exliaust  to  an  enclosed  cooling  ap- 
paratus which  turns  the  exliaust  steam  into  a  few  drops  of 
water.  The  condenser  reduces  the  back  pressure,  and  also 
E/Ccomplishes  other  results.  The  water  contains  considerable 
heat  on  leaving  the  condenser,  and  for  many  years  engineers 
worked  on  tlie  problem  of  utilizing  this  waste.  At  first  it 
was  pumped  into  the  boiler  directly,  but  the  lubricating  oil 
in  the  cylinder  being  imited  with  the  water  caused  much 
trouble  in  the  boiler  by  adliering  to  the  tubes  and  plates,  thus 
impeding  the  flow  of  heat  and  likewise  causing  the  water  to 
foam.  Devices  were  invented  to  extract  the  oil  from  the 
water  before  it  was  pumped  back  into  the  boiler.  There  are 
now  scores  of  oil  separators  on  the  market.  Some  are  more 
or  less  effective  and  some  are  very  good.  A  good  separator 
both  enables  the  boiler  plant  to  save  the  heat  and  reduces  the 
water  bills,  and  in  some  sections  of  the  country  this  is  a  very 
important  item.  Many  plants  find  the  water  bills  so  consid- 
erable that  they  make  it  a  practice  to  use  the  surface  rather 
than  the  jet  condenser,  because  the  former  keeps  the  original 
boiler  water  free  from  contact  with  the  cooling  liquid,  which 
may  be  full  of  impurities,  either  suspended  or  in  solution. 
In  it  the  exhaust  is  transformed  into  water  by  permitting  a 
cold  stream  to  play  on  the  outside  of  the  pipes  which  carry 
the  steam  from  the  cylinder.  The  cold  water  in  time  be- 
comes highly  heated  on  account  of  its  contact  with  so  many 
hot  pipes.  In  order  to  use  it  over  and  over  indefinitely, 
cooling  towers  or  sometimes  ponds  are  constructed.  In  the 
former  the  water  is  pimiped  to  the  top  of  a  high  elevation, 
whence  it  falls  over  a  series  of  plates,  so  that  by  the  time 
the  bottom  is  reached,  it  is  again  cool  enough  to  condense 
the  steam.  The  jet  condenser  accomplishes  its  task  by  spray- 
ing a  fine  stream  of  water  on  the  steam  as  it  comes  from  the 
cylinder. 

After  the  power  haa  been  developed  in  the  cheapest  poaai- 


THE  POWER   PROBLEM  177 

ble  way  within  the  limitations  of  the  environment,  the  ques- 
tion of  carrying  the  power  to  the  machines  in  the  most  eco- 
nomical way  arises.  The  writer  knows  of  one  plant  where 
tests  showed  that  more  than  43  per  cent  of  the  power  was 
lost  between  the  fly-wheel  of  the  steam  engine  and  the  ma- 
chinery. There  are  five  ways  of  distributing  power  from  the 
power  house  to  the  plant : 

1.  Pipe  Steam  from  Boiler  House  to  Engines. — One  of 
the  oldest  schemes  is  to  have  the  boiler  house  located  at 
some  central  point  and  pipe  the  steam  to  the  various  de- 
partments where  the  machinery  is  located.  This  scheme  is 
used  where  fuel  is  cheap.  It  occasionally  may  be  seen  in 
steel  plants  of  the  older  type  and  in  the  vicinity  of  coal 
mines. 

2.  Tahing  Power  from  Ply- Wheel  l>y  Pelts. — Another 
uneconomical  scheme,  but  one  still  frequently  observed,  is 
to  have  the  power  taken  from  the  fly-wheel  of  the  engine  by 
a  large  belt  to  main  shafts  which  run  the  entire  length  of  the 
various  departments  which  utilize  the  power.  From  these 
main  shafts  are  run  other  belts  to  countershafts  from  which 
the  power  is  distributed  again  by  belts  to  the  individual  ma- 
chines. This  scheme  has  two  objections — it  wastes  much 
power  through  the  turning  of  useless  shafting,  especially  if 
the  plant  is  one  which  uses  its  power  intermittently,  and  it 
is  condemned  by  insurance  companies  because  it  is  liable  to 
facilitate  the  spread  of  fire.  The  latter  objection  is  overcome 
to  a  great  extent  by  a  rearrangement  of  the  main  driving 
belt.  The  belts  are  enclosed  in  a  belt  tower  and  are  not  per- 
mitted to  pass  through  the  floors  of  the  building.  The  main 
belt  runs  small  shafts  within  the  tower.  These  small  shafts 
have  other  shafts  connected  with  them  by  means  of  belts  by 
which  are  run  the  various  machines.      (See  Fig.  19.) 

There  are  two  classes  of  belt  drives,  the  older  form  con- 
sisting of  a  wide  band  of  leather  or  rubber  composition, 
which  transfers  the  power  from  the  generator  to  the  depart- 


178    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

ments,  and  the  more  recent  form  consisting  of  rope  belts  or 
drives  as  they  are  usually  called.  The  old  style  is  for  large 
powers  rather  more  expensive  and  difficult  to  handle  than 
the  rope  drive.  It  requires  greater  care  and  skill  in  aligning 
the  shafts  and  pulleys.  Since  the  belt  tension  is  not  self- 
adjustable,  it  is  necessary  t£»  tighten  the  bands  so  that  they 
can  carry  the  heaviest  loads  without  slippage.  Thus  there  is 
more  wear  on  the  journals  than  is  necessary  with  the  rope 
drive.  The  rope  drive  claims  several  other  advantages.  With 
it  one  can  transmit  power  over  long  distances  across  spaces 
exposed  to  the  weather.  It  can  transmit  at  any  angle,  and 
the  same  pulley  may  drive  two  line  shafts.  The  rope  drive 
is  more  economical  in  transmitting,  and  for  large  units  is 
cheaper  to  install  and  less  expensive  to  maintain.  It  needs 
less  space  to  carry  a  given  horse  power,  has  a  more  steady 
pull,  is  less  noisy,  is  free  from  static  electrical  disturbances, 
and  it  can  provide  for  future  extensions  in  power  more  read- 
ily than  the  old  style  belt  drive. 

The  rope  drive,  however,  is  for  small  units  more  expen- 
Bive  to  install  because  it  requires  special  sheave  wheels  and 
a  trained  man  to  get  it  running,  ^yhere  the  units  are  large 
and  one  has  an  employee  familiar  with  the  rope  drive,  the 
latter  is  more  economical;  Isut  in  small  places  where  the 
amount  to  be  carried  is  not  great,  and  is  limited  to  small 
distances  within  doors,  the  old  style  belt  drive  is  a  little 
cheaper. 

3.  Electrical  Transmission. — Electrical  power  can  be 
transmitted  in  two  ways: 

(a)  By  having  large  motors  located  at  various  parts  of 
the  plant,  arranged  so  that  they  can  run  a  number  of  ma- 
chines. This  plan  is  known  as  the  group  drive.  (See  GD^ 
Fig.  21.)  The  group  drive  is  a  little  less  economical  in 
transmitting  power,  but  it  requires  a  smaller  initial  expen- 
diture to  install  than  do  the  individual  motors. 

(b)  The  individual  motor  drivQ.     (See  Fig.  16.)    The 


THE  POWER  PROBLEM  179 

individual  motor  drive  is  expensive  to  install,  but  it  is  eco- 
nomical of  energy.  Moreover,  the  separate  motors  make  it 
easy  to  determine  the  exact  amount  of  power  each  machine 
is  using.  It  is  economical  in  power  utilization  in  that  there 
is  no  power  lost  when  a  machine  is  not  running. 

If,  however,  the  motor  drive  rested  its  claims  only  upon 
economy  in  power  transmission,  it  would  hardly  deserve  the 
vogue  it  has  obtained ;  because,  if  the  extra  cost  of  invest- 
ment is  matched  against  the  power  saving  instituted,  there 
is  question  as  to  whether  there  would  be  net  gain  by  its  in- 
stallation. The  motor  drive  has  a  fair  claim  to  recognition 
in  that  it  makes  possible  other  savings  besides  preventing 
waste  in  power  transmission.  In  the  first  place,  it  makes  a 
larger  output  possible,  because  it  gives  the  operators  such 
perfect  control  of  their  machines.  With  that  system  of 
power  distribution  the  work-rooms  become  more  pleasant  to 
the  employees,  there  is  more  light,  less  dust,  and  usually 
less  danger.  Where  these  conditions  obtain,  a  concern  gets 
so  much  greater  output  that  the  extra  investment  necessary 
for  electrical  power  can  well  be  afforded. 

4.  Air  Pressure. — Air  pressure  is  more  convenient  than 
economical,  but  all  things  being  considered,  it  is  probably 
the  cheapest  kind  of  power  available  for  the  driving  of  small 
tools  like  chipping  machines,  riveters,  and  almost  all  kinds 
of  portable  labor-saving  devices  used  around  a  plant.  It  is 
neither  so  cheap  nor  so  convenient  as  electricity  and  belting 
for  stationary  machines,  and  hence  is  seldom  used  for  such 
purposes. 

5.  Hydraulic  Power. — Another  scheme  of  transmitting 
power  is  by  means  of  water.  Hydraulic  pressure  is  conve- 
nient for  use  in  elevator  service,  or  in  any  place  where  it  is 
desirable  to  exert  great  pressure.  It  is,  however,  for  general 
service  somewhat  slow  working,  and  is  also  rather  expensive. 

This  chapter  has  not  mentioned  all  kinds  of  power  gen- 
erators nor  aU  the  various  transmitting  devices.     To  do  so 


180    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

would  require  a  special  volume.  The  important  factors  in 
both  classes  have  been  considered.  No  one  can  state  abso- 
lutely for  either  generators  or  transmitters  which  is  the  best, 
all  things  considered,  because  conditions  vary  to  such  a  de- 
gree that  one  scheme  may  be  very  economical  in  one  place 
and  in  another  be  an  unnecessary  extravagance. 


PART  THREE 
ORGANIZATION  AND  MANAGEMENT 


CHAPTER  XIII 
THE  THREE  TYPES    OF   ORGANIZATION 

In  Parts  I  and  II  the  questions  which  the  lousiness  exec- 
utive must  consider  have  been  discussed.  The  creation  of 
an  ideal  equipment  solves  about  one  half  of  the  problem  of 
industrial  management.  The  plant  must  yet  be  put  under  a 
satisfactoiy  organization  before  it  can  be  well  managed.  The 
works  manager  must  so  combine  the  equipment  which  has 
been  given  him  with  labor  and  material  that  the  product  of 
the  plant  will  be  the  cheapest  and  best  that  can  be  manu- 
factured. The  sales  dej^artment  must  put  the  goods  on  the 
market  efficiently. 

The  works  manager's  field  in  the  concern  is  limited  to 
the  production  department  of  business.  His  work  begins 
with  the  receipt  of  the  order  and  ends  with  its  shipment. 
He  has  nothing  to  do  with  the  soliciting  of  orders,  he  is  not 
concerned  with  the  finances  of  the  firm  nor  with  its  legal  diffi- 
culties. His  work  begins  and  ends  with  production.  To 
perform  his  duties  ideally: 

1.  He  must  get  the  work  performed  rapidly. 

2.  He  must  get  the  work  performed  accurately. 

3.  He  must  get  the  maximum  result  from  the  machinery. 

4.  He  must  get  the  maximum  product  from  the  raw  ma- 
terial. 

5.  He  must  see  that  improvements  in  methods  are  intro- 
duced. 

In  order  to  get  this  work  performed,  there  have  been 
evolved  three  kinds  of  industrial  organization — ^the  military, 
lunctional,  and  departmental  types. 

1B3 


184    THE  PRINCIPLES  OF  INDUSTRIAL   MANAGEMENT 

The  Military  System  of  Organization. — This  is  the  old- 
est and  was  almost  the  only  one  until  very  recent  years. 
According  to  the  military  scheme,  all  power  and  authority 
for  directing  the  work  emanate  from  one  man,  who  is  held 
responsible  for  everything  that  is  done  in  any  part  of  the 
division  under  his  control.  With  his  plan  the  leader  does 
not  give  general  directions  and  then  look  for  results.  He 
keeps  control  of  all  details  that  arise  within  his  sphere  of 
command.  The  armies  of  former  ages  were  run  according 
to  this  plan.  The  general-in-chief  gave  directions  concern- 
ing the  health  of  the  men,  the  way  they  should  march ;  he 
saw  to  the  provisioning  of  the  troops,  and  in  fact  Caesar, 
Napoleon,  Frederick,  and  many  other  great  military  leaders, 
directed  the  affairs  of  the  state  as  well.  Curiously  enough 
the  modern  army  is  no  longer  run  according  to  the  old  style 
military  system.  The  health  of  the  troops  is  under  the  care 
of  a  distinct  body  of  men,  the  provisioning  and  supplying  of 
the  troops  is  attended  to  by  another  group  of  officials.  The 
commander-in-chief  now  decides  upon  the  general  plan  of 
the  campaign.  He  plans  where  and  how  battles  shall  be 
fought,  but  modern  warfare  no  longer  makes  it  possible  for 
him  to  lead  his  men  as  did  the  youthful  Alexander,  the 
great  Napoleon,  or  as  did  Scott,  Lee,  or  Grant  in  American 
history.  The  army  now  has  a  staff  organization  which  cor- 
responds very  closely  to  the  departmental  system  used  in  the 
progressive  firms  of  to-day. 

With  the  military  system  of  industrial  organization  every 
officer  in  each  division  or  subdivision  is  held  responsible  for 
all  that  happens  within  his  province.  No  matter  what  mis- 
takes are  made,  he  is  the  one  who  must  stand  the  conse- 
quences. If  a  foreman  has  charge  of  a  shop  and  that  shop 
runs  behind  in  orders,  is  extravagant  in  the  consumption  of 
supplies  or  power,  or  is  deficient  in  the  quality  of  work 
turned  out,  the  foreman  in  charge  is  responsible.  He  is 
given  a  division  presumably  sufficiently  small  to  make  it 


THE  THREE  TYPES  OF  ORGANIZATION  185 

possible  for  a  reasonably  good  man  to  look  after  details,  and 
everything  is  considered  distinctly  within  the  scope  of  his 
duties.  He  is  expected  to  keep  his  men  always  supplied 
with  work.  He  must  see  that  the  machines  are  in  working 
order.  He  must  be  able  to  select  good  men  and  keep  them. 
If  any  question  arises  concerning  how  things  should  be  done, 
he  should  be  able  to  give  explicit  directions.  He  must  de- 
tect work  that  is  not  properly  done,  know  on  whom  to  saddle 
the  blame,  and  must  also  remedy  the  faults.  In  a  word,  he 
must  be  a  thorough,  all-round  man  to  fill  his  place  properly. 
A  trained  man  of  ordinary  ability  can  efficiently  direct 
from  fifty  to 'one  hundred  and  fifty  people  in  simple,  ordi- 
nary tasks  which  require  little  mechanical  ability.  It  is  only 
the  exceptional  man  of  considerable  experience  and  famili- 
arity with  the  work  who  can  profitably  direct  more  than  one 
hundred  and  fifty  or  two  hundred  workmen.  In  continuous 
industries,  of  both  the  synthetical  and  analytical  types,  a 
large  number  of  processes  are  simply  and  easily  directed. 
The  work  is  almost  entirely  routine.  The  machinery  is  nearly 
if  not  quite  automatic.  There  are  no  great  calls  upon  the 
intelligence  of  the  foreman,  because  there  is  very  little  to  be 
done  outside  of  seeing  that  the  workers  are  at  their  posts  and 
are  turning  out  an  adequate  amount  of  material.  In  such 
industries,  the  military  organization  is  ideal,  because  the  task 
should  be  quite  within  the  limits  of  the  foreman's  ability, 
and  the  responsibility  can  be  constantly  fixed  upon  him.  If 
he  fails  to  prove  equal  to  his  position,  there  is  no  great  diffi- 
culty in  obtaining  another  man.  Generally  speaking,  the 
executives  of  these  types  of  industries  do  not  find  their  labor 
management  problems  difficult  of  solution  in  the  production 
departments.  Their  energies  can  be  directed  toward  the  dis- 
tributive department,  and  to  finding  a  corps  of  workers  who 
will  develop  the  mechanical  efficiency  of  the  machinery,  look 
to  the  economies  of  the  processes  and  power-saving  possibil- 
ities and  to  other  similar  questions. 


186    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

In  industries  which  depend  to  a  greater  extent  upon  the 
ingenuity  and  efforts  of  the  laborer  who  cannot  be  so  greatly 
aided  by  machinery,  the  military  organization  shows  ita 
weakness. 

The  machine  shops  in  the  assembling  industries  were 
the  first  to  feel  the  limitations  of  the  military  system.  Foi 
many  years,  no  one  noticed  its  deficiencies,  because  the  shops 
were  small  and  one  man  could  attend  to  all  the  details  and 
give  a  fair  degree  of  satisfaction,  ^\^len,  however,  the  de- 
partments grew  to  more  than  two  hundred  workmen,  the 
scheme  began  to  break  down.  Xo  one  could  look  after  all 
the  details  of  so  large  a  shoj).  It  was  useless  to  discharge  the 
overseers,  because  no  one  could  he  found  equal  to  the  task. 
It  is  a  dictum  in  management  that  if  punishment  by  dis- 
charge does  not  eliminate  failures  and  mistakes  in  an  or- 
ganization the  scheme  in  itself  is  vitally  wrong. 

Works  managers  gradually  came  to  appreciate  that  the 
defects  were  due  to  the  system,  so  they  sought  to  eliminate 
the  weaknesses  of  too  highly  concentrated  authority  lay  divid- 
ing the  leadership  among  several  men,  each  being  equally 
responsible  to  the  superintendent.  This  solved  the  problem 
of  giving  the  foreman  a  reasonable  number  of  people  to  look 
after,  but  it  increased  the  unproductive  labor  expenses  and 
tended  to  make  a  conflict  in  authority  and  interests.  For 
example,  the  foreman  of  the  machines  in  order  to  make  a 
good  showing  would  be  apt  at  times  to  have  his  men  rush 
the  work  through  in  a  hasty  manner,  expecting  the  erecting 
gang  or  bench  hands  to  make  good  his  deficiencies.  The 
bench  foreman  would  also  slight  his  work.  If  hea\y  castings 
were  to  be  moved  by  the  cranes,  two  foremen,  equal  in  au- 
thority, would  put  the  riggers  and  crane  men  in  an  exceed- 
ingly unpleasant  situation  because  both  would  insist  upon 
immediate  attention.  There  was  but  one  out<3ome.  The  rig- 
gers ser\'ed  whomsoever  they  pleased.  The  writer  is  familiar 
with  a  shop  where  the  riggers  were  bribed  by  an  ambitious 


THE  THREE  TYPES   OF  ORGANIZATION  187 

gang  boss  to  attend  to  his  requests.  He  needed  the  services 
of  the  crane  for  a  considerable  length  of  time.  However, 
there  were  intervening  periods  of  a  half  hour  or  so  in  which 
the  crane  could  be  used  to  fill  machines  and  move  other  cast- 
ings. Instead  of  using  this  time  and  making  the  favored 
man  wait  an  occasional  quarter  or  half  hour,  the  riggers  stood 
])y  the  job,  holding  up  the  machines  and  erectors  the  l^etter 
part  of  the  day.  Of  course  this  is  an  exceptional  and  most 
glaring  example  of  the  weakness  of  this  scheme,  but  it  is 
nevertheless  a  weakness  which  grows  out  of  too  extended  a 
spreading  of  the  military  system. 

Briefly  summarized,  the  advantages  of  the  military  system 
of  management  are : 

1.  It  unifies  the  work,  putting  it  all  in  the  hands  of  one 
individual. 

2.  It  fixes  the  responsibility  for  the  performance  of  tasks 
in  a  definite  manner  upon  certain  individuals. 

Its  disadvantages  are: 

1.  When  a  plant  becomes  too  large  the  foremen  are  held 
responsible  for  too  many  things,  and  cannot  justly  be  held 
accountable  for  blunders  or  for  smaUness  of  productivity  in 
machines  and  men. 

2.  The  foremen  have  so  much  to  do  that  they  cannot  see  to 
the  introduction  of  improvements  as  rapidly  as  is  desirable. 

The  military  system  of  works  organization  in  a  large  con- 
cern leads  to  chaos  in  management,  because  it  fails  to  pre- 
vent bad  work  and  to  stop  the  nursing  of  jobs.  It  has  no 
means  of  rewarding  the  efficient  man  or  of  pmiishing  the  poor 
worker  or  loafer.  Managers  of  plants  who  worked  with  the 
military  system  in  their  younger  days  were  puzzled  as  to  why 
the  later  generation  developed  so  few  good  foremen  and  w'ly 
it  brought  forth  so  many  poor  workmen.  They  did  not  rec- 
ognize the  fact  that  it  was  due  not  to  a  degeneration  in  the 
younger  members  of  the  community  but  to  an  inherent  fault 
in  the  system.     Thougbtf^d  students  felt  the  oeed  of  some-* 


188    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

thing,  but  hardly  knew  what.  Some  plants  tried  varying 
schemes  of  running  their  work.  Several  concerns  hit  upon 
the  plan  of  piece  wage  pa}Ti]ent  and  careful  inspection  of 
material  by  independent  inspectors  who  were  held  responsi- 
ble. This  scheme  has  worked  with  a  reasonable  degree  of 
success,  but  there  are  so  many  ways  of  fooling  the  inspector 
and  of  getting  bad  work  passed,  and  there  are  so  many  possi- 
ble evasions  of  the  piece  wage  scheme  that  it  was  soon  re- 
alized that  another  change  was  necessary  before  this  method 
would  prove  efficient.  The  piece  wage  pajTuent  and  inspec- 
tion scheme  did  lead  to  something  better. 

Piece  workers,  on  account  of  the  fact  that  they  are  working 
for  themselves,  are  insistent  upon  allowances  being  made  for 
all  kinds  of  contingencies.  The  manufacturer  finds  it  more 
profitable  to  lighten  their  duties,  and  to  limit  as  little  as 
possible  the  movement  of  the  workers.  He  soon  begins  to 
study  how  the  work  can  be  divided  and  men  assigned  to  cer- 
tain parts.  From  this  development  arose  the  functional  sys- 
tem of  organization. 

Tfie  Functional  System. — The  greatest  exponent  in  Amer- 
ica of  the  functional  system  of  organization  is  Mr.  Frederic 
W.  Taj'lor,  a  past  president  of  the  American  Society  of 
Mechanical  Engineers.  Mr.  Taylor  has  held  a  great  number 
of  responsible  positions  in  various  sections  of  the  country, 
and  has  made  an  enviable  reputation  in  the  engineering 
world.  His  paper  entitled  ''Shop  Management,"  delivered 
before  the  Society  of  Mechanical  Engineers,  is  a  memorable 
contribution.  In  that  paper  he  discussed  the  management 
of  a  shop  under  the  functional  system  of  organization. 

''Functional  organization  consists  in  so  dividing  the  work 
of  management  that  each  man  from  the  assistant  superinten- 
dent down  shall  have  as  few  functions  as  possible  to  perform.  "* 

^  Cf .  Transactions  American  Society  of  Mechanical  Engineers, 
Vol.  XXIV,  Paper  No.  1003,  p.  1391. 


THE  THREE  TYPES  OF  ORGANIZATION  189 

The  scheme  is  based  upon  the  theory  of  the  division  of  labor 
as  applied  to  management.  A  workman  in  a  machine  shop 
according  to  this  plan  is  not  under  one  but  several  foremen. 
Mr.  Taylor  advocates  four  shop  bosses :  gang  boss,  sj)eed  boss, 
inspector,  and  repair  boss.  The  gang  boss  has  charge  of  pre- 
paring the  work  up  to  the  time  that  the  piece  is  set  in  the 
machine.  He  must  show  his  men  how  to  set  the  work  on 
the  machine  in  the  quickest  possible  time  and  in  the  best 
possible  way.  The  speed  boss  has  the  function  of  providing 
the  proper  tools  for  the  workman  on  the  machine.  He  cuist 
see  that  the  cuts  are  started  at  the  right  place  and  that  the 
machine  is  speeded  up  to  its  proper  limit.  The  inspector  is  re- 
sponsible for  the  quality  of  the  work,  and  both  workmen  and 
speed  bosses  must  finish  the  work  to  suit  him.  The  repair 
boss  sees  that  each  machine  is  kept  in  working  condition, 
is  cleLa,  free  from  rust  and  scratches,  and  is  properly  oiled 
In  addition  to  these  four  shop  overseers  the  workmen 
come  into  contact  with  the  representatives  of  the  planning 
department,  whose  function  is  to  relieve  the  shop  foremen  of 
all  thought  of  how  the  work  should  be  arranged  and  distrib- 
uted to  the  machines.  Four  representatives  of  the  planning- 
room  also  come  in  contact  with  the  workmen,  the  order  of 
work  or  route  clerk,  instruction  card  man,  time  and  cost 
clerk,  and  the  shop  disciplinarian.  The  route  clerk  writes  a 
daily  list,  instructing  the  workmen  and  all  shop  bosses  as  to 
the  exact  order  in  Avhich  the  work  is  to  be  done  by  each  class 
of  machines  or  men.  The  instruction  card  man  states  in 
writing  the  general  and  detailed  drawing  to  refer  to,  the  piece 
niunber  and  cost  order  number  to  charge  the  work  to,  the 
special  jigs  to  use,  the  depth  of  cut  to  be  made,  the  number 
of  cuts  to  make,  and  the  time  in  which  the  job  should  be  fin- 
ished. He  also  sets  the  piece  rate.  The  time  and  cost  clerk 
sends  to  the  men  through  the  instruction  card  all  the  infor- 
mation they  need  for  recording  their  time  and  cost  of  work* 
and  he  secures  the  proper  returns  from  the  men. 


190    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

"In  case  of  insubordination  or  impudence,  repeated  failure  to 
do  their  duty,  lateness  or  unexcused  absence,  the  shop  disciplinarian 
takes  the  workman  or  bosses  in  hand  and  applies  the  proper  rem- 
edy, and  sees  that  a  complete  record  of  each  man's  virtues  and 
defects  is  kept.  This  man  should  also  have  much  to  do  with  read- 
justing the  wages  of  the  workmen.  At  the  very  least,  he  should 
invariably  be  consulted  before  any  change  is  made.  One  of  his 
important  functions  should  be  that  of  peacemaker."  ^ 

To  quote  Mr.  Taylor  again: 

"The  greatest  good  resulting  from  this  change  is  that  it  becomes 
possible  in  a  comparatively  short  time  to  train  bosses  who  can 
really  and  fully  perform  the  functions  demanded  of  them,  while 
under  the  old  system  it  took  years  to  train  men  who  were  after  all 
able  to  thoroughly  perform  only  a  portion  of  their  duties.  .  .  , 
Another  great  advantage  resulting  from  divided  foremanship  is 
that  it  becomes  entirely  practicable  to  apply  the  four  leading  prin- 
ciples of  management  to  the  bosses  as  well  as  to  the  workmen."  ^ 

The  four  leading  principles  of  management  to  which  Mr. 
Taylor  refers  in  this  last  statement  are: 

1.  A  large  daily  task  should  be  given  to  the  men. 

2.  The  men  should  be  given  standard  conditions,  making 
it  possible  to  perform  the  task. 

3.  They  should  be  given  a  high  pay  for  success. 

4.  They  should  lose  in  case  they  fail  to  reach  the  require- 
ments of  the  daily  task.' 

Viewing  the  subject  from  a  broader  point  of  view,  there 
are  other  advantages  to  be  gained  from  the  functional  organi- 
zation. 

1.  The  work  is  divided  so  that  one  man  need  attend  to 
only  one  thing.     It  enables  comj)lete  specialization  of  labor. 

2.  It  definitely  fixes  the  responsibility  for  the  performance 
of  each  function  upon  one  man. 

^  Transactions  American  Society  of  Mechanical  Engineers^  VoL 
XXIV,  pp.  1393,  1394. 

8  Ibid.,  p.  1394.  8  Ibid.,  p.  1368. 


THE  THREE  TYPES  OF  ORGANIZATION  191 

3.  It  allows  the  workman  opportunity  to  think  out  im- 
provements by  enabling  him  to  make  an  intensive  study  of 
his  work. 

Notwithstanding  all  of  these  advantages  the  functional 
system  of  organization  has  not  proven  popular  or  successful 
in  a  number  of  plants  where  it  has  been  tried.  It  causes 
men  to  lose  initiative.  It  has  a  tendency  to  shift  and  divide 
the  responsibility  in  spite  of  the  contrary  intention.  This 
has  been  found  to  be  true  in  several  places  where  the  plan 
has  been  tried.  The  difficulties  that  have  been  encountered 
in  carrying  the  scheme  through  are : 

1.  It  requires  a  great  amount  of  clerical  work  to  fill 
out  instruction  cards  and  write  out  all  orders  and  minute 
instructions  necessary  for  the  complete  enforcement  of  the 
scheme. 

2.  It  is  exceedingly  hard  at  times  to  define  clearly  to 
whom  certain  functions  belong  and  on  whom  the  responsi- 
bility rests  when  things  go  wrong.  For  instance,  no  less  than 
eight  bosses  outside  of  the  shop  disciplinarian  come  into  di- 
rect contact  with  the  workmen.  Four  of  these  men  make  out 
instructions,  and  four  others  say  how  they  should  be  carried 
out.  It  not  infrequently  happens  that  the  man  who  makes 
out  the  instructions  is  somewhat  vague  in  his  directions,  in 
the  hope  that  the  speed  boss  or  gang  boss  will  make  up  de- 
ficiencies. If  a  mistake  occurs  under  these  conditions,  it 
becomes  a  difficult  matter  to  determine  who  is  to  blame^ 
because  the  instructions  man  will  plead  that  they  were  not 
interpreted  correctly  and  the  other  bosses  will  assert  that 
such  interpretations  could  be  made.  Sometimes  the  instruc- 
tion card  man  will  give  instructions  and  the  gang  bosses 
may  see  a  better  method.  If  they  do,  the  chances  are  that 
they  will  want  to  put  their  scheme  into  operation.  Hence 
there  wiU  be  a  conflict  of  authority.  If  a  boss  adheres  to 
the  system  and  doesn't  follow  the  best  method  possible  under 
the  circumstances,  the  firm  is  paying  for  a  system  of  man* 

U 


192    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

agement  which  is  failing  in  its  purpose  of  getting  the  goods 
out  in  the  cheapest  possible  manner. 

3.  It  is  cumbersome  and  expensive  to  operate.  In  every 
shop  the  jobs  must  be  assigned  to  men  at  all  kinds  of  odd 
times  during  the  day.  If  a  workman  desires  to  start  on  his 
job  he  must  come  into  contact  with  at  least  three  of  those 
bosses  before  he  can  do  an}i:hing.  There  are  usually  several 
men  desiring  jobs  at  one  time.  Under  a  system  where  the 
workman  is  supposed  to  know  how  to  set  up  a  job  and  inter- 
pret instructions,  he  merely  needs  to  find  out  what  he  is  sup- 
posed to  do,  and  do  it,  calling  on  the  boss  only  when  there 
are  complications.  With  this  functional  scheme  he  is  not 
supposed  to  act  on  his  own  initiative.  As  a  matter  of  fact, 
so  many  bosses  really  hinder  the  work.  They  irritate  the 
men  and  are  expensive  to  keep  up,  because  in  a  large  shop 
they  must  have  a  number  of  sets  of  bosses  to  carry  out  the 
scheme  as  laid  down. 

TJie  Departmental  System.  — In  advocating  the  functional 
system  of  works  organization,  Mr.  Taylor  made  a  valuable 
contribution  in  that  he  brought  out  the  idea  of  dividing  the 
work  in  such  a  way  that  it  could  be  looked  after  by  func- 
tions rather  than  by  comjDlete  units.  No  plan  of  organiza- 
tion can  be  successful  unless  it  is  workable.  The  military 
type  fails  to  be  workable  in  large  organizations,  because  it 
is  impossible  to  get  men  who  are  capable  of  filling  the  lead- 
ing positions.  With  the  functional  plan  it  is  possible  to 
train  a  sufficient  number  of  men  to  carry  out  the  functional 
duties,  but  it  is  only  under  the  most  exceptional  conditions 
that  these  various  functions  can  be  clearly  defined  and  the 
scheme  worked  without  conflict  and  irritation.  If  there  is  a 
remarkable  man  at  the  head  who  can  smooth  all  points  and 
be  everywhere  present  whenever  a  difiiculty  arises  with  con- 
flicting ideas  and  authorities,  the  system  has  a  chance  of 
working;  but  in  this  every-day  world  a  highly  sensitive  or- 
ganization of  that  character,  no  matter  how  perfect  on  paper. 


THE  THREE  TYPES   OF  ORGANIZATION  193 

is  bound  to  be  disrupted  by  the  bumps  and  collisions  of 
daily  strife.  A  finely  adjusted,  compensated  astronomical 
chronometer  will  keep  perfect  time,  provided  it  is  wound  up 
at  certain  stated  inters'als,  and  is  kept  from  jars  and  vibra- 
tions and  extremes  of  temperature,  but  for  ordinary  day  use 
to  carry  around  in  the  pocket,  a  dollar  watch  may  prove 
more  satisfactor)^  Works  managers  need  the  dollar-watch 
combination,  and  they  have  found  it  in  combining  the  good 
features  of  both  the  military  and  functional  systems  of  or- 
ganization. Hundreds  of  i^lants  at  the  present  time  use  the 
departmental  system  without  being  fully  aware  of  what  they 
are  doing.  The  departmental  system  does  the  following 
things : 

It  divides  the  plant  up  into  a  number  of  clearly  defined 
departments,  and  puts  each  under  the  control  of  a  gang  boss, 
who  is  given  general  directions  to  work  to  and  is  held  re- 
sponsible for  results  and  not  for  servile  attention  to  detailed 
instructions.  Thus  in  a  machine  shop  there  is  a  man  to  look 
after  the  large  machine  tools,  such  as  lathes,  planers,  and 
milling  machines.  Another  foreman  will  be  appointed  to 
look  after  the  erection  of  the  large  parts  of  the  engine, 
another  wiU  be  given  a  valve-setting  gang,  and  stiU  another 
may  be  given  charge  of  the  tool-room,  and  another  will  look 
after  the  stores.  The  riggers  or  crane  men  wiU  be  under  a 
sub-foreman,  who  will  have  to  keep  all  the  machines  supplied 
with  work.  In  addition  to  these,  the  repair  department  will 
be  in  the  hands  of  one  man,  a  tool-making  and  grinding  de- 
partment in  the  hands  of  anothei^  and  the  stores  department 
in  the  hands  of  another.  All  ol  these  men  wiU  be  under  a 
head  foreman  or  superintendent.  Each  man  is  held  responsi- 
ble for  the  output  of  his  machines.  When  a  set  of  drawings 
of  an  order  comes  into  the  shop,  the  head  foreman  wiU  ex- 
amine the  drawings  and  call  in  the  various  gang  bosses.  He 
will  teU  them  the  things  they  are  to  look  after.  Each  man 
clearly  understands,  from  either  written  or  orfd  instructions, 


194     THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

his  particular  province.  It  is  then  his  duty  to  keep  his  ma- 
chines going  and  his  men  employed  on  their  particular  tasks. 
The  work,  when  performed  and  inspected,  is  passed  on  to  the 
other  departmental  boss.  If  the  succeeding  gang  boss  finds 
any  defects  in  the  work,  he  must  at  once  report  the  mistakes, 
or  he  will  be  held  responsible  f<yr  all  defects  uncovered  by  his 
immediate  successor. 

The  departmental  system  divides  the  work  up  into  small 
departments,  each  under  the  absolute  control  of  a  man,  and 
the  departments  are  so  related  to  each  other  that  no  individ- 
ual workman  will  have  to  obey  two  bosses.  The  riggers,  for 
instance,  in  the  military  system  serv^ed  any  man  upon  re- 
quest. In  the  functional  system,  the  riggers  obey  a  rigging 
boss  who  is  at  the  beck  and  call  of  a  half  dozen  functional 
foremen.  In  the  departmental  system,  the  rigging  boss  learns 
from  the  head  foreman  the  conditions  of  the  large  castings, 
and  about  when  they  are  to  be  moved,  and  adjusts  his  gangs 
in  such  a  way  that  there  will  be  a  minimum  of  waiting 
throughout  the  entire  shop.  If  the  head  foreman  finds  any 
men  idle  due  to  the  fact  that  they  cannot  work  because  cast- 
ings are  not  moved,  he  can  at  once  ascertain  whether  the  boss 
rigger  has  arranged  the  movements  correctly,  or  whether 
there  is  insufficient  crane  service.  Whatever  the  reason, 
there  is  one  man  from  whom  an  explanation  can  be  de- 
manded and  readjustments  promptly  made.  If  the  machines 
are  not  turning  out  sufficient  work  or  are  giving  poor  service, 
the  departmental  boss  cannot  blame  the  speed  boss  or  an  in- 
struction-card boss.  He  has  the  machines  to  look  after.  If 
his  men  are  not  efficient,  he  is  to  blame,  because  he  should 
report  and  discharge  the  delinquents.  If  the  machines  are 
in  bad  condition,  he  is  at  fault,  tecause  it  is  his  duty  to  re- 
port defects  and  breaks  at  once,  and  insist  that  they  be  re- 
paired. A  machine  boss  should  never  let  a  machine  get  into 
general  bad  repair.  The  erecting  boss  is  to  blame  if  the 
erecting  is  progressing  slowly  or  is  poorly  done.     The  great 


THE   THREE  TYPES   OF   ORGANIZATION  195 

advantage  of  this  departmental  system  is  that  the  responsi- 
bility can  be  fixed;  it  is  possible  to  train  men  to  fill  the  jobs, 
and  it  is  impossible  to  have  any  shifting  of  responsibility, 
because  the  men  must  show  results  in  output,  and  not  prove 
that  they  have  given  or  followed  instructions. 


CHAPTER  XIV 

THE    LABOR   FORCE 

Before  the  emi^loyer  can  decide  how  he  is  going  to  run 
his  labor  force  he  must  determine  what  kind  of  labor  he  is 
going  to  use,  because  his  treatment  of  employees  will  be  in- 
fluenced to  a  very  great  extent  by  the  labor  personnel.  The 
labor  force  may  be  men,  women,  or  children.  Adult  male- 
labor  is  for  the  greater  majority  of  the  important  industries 
the  most  profitable  kind  of  labor.  There  are,  however,  a 
great  number  of  industries  wherein  women  and  children  may 
be  employed  with  profit,  because  they  work  for-  less  wages 
and  have  their  natural  aptitudes  for  the  work.  The  indus- 
tries that  can  employ  women  and  children  are  the  textiles, 
shoe  factories,  and  other  concerns  which  produce  either  light 
materials  or  goods  which  require  deftness  in  handling.  We 
may  compare  male  and  female  labor  in  the  following  way : 

1.  Comparison  of  Male  and  Female  Labor. — Male 
labor  is  stronger  and  has  greater  physical  endurance.  Men 
alone  are  able  to  stand  long-continued  heavy  work,  such  as 
is  required  in  a  shipyard,  steel  plant,  or  locomotive  shop. 

2.  Men  are  more  apt  to  be  permanent  employees.  The 
home  is  woman's  ultimate  sj)here.  A  woman's  maximum 
working  period  in  industrial  occupation  is  usually  limited  to 
the  time  she  leaves  the  grammar  or  high  schools  until  she 
reaches  the  age  of  thirty.  In  that  time,  she  may  serve  an 
apprenticeship  to  a  trade,  and  become  a  capable,  conscien- 
tious employee.  She  is,  however,  apt  at  any  time  to  marry 
and  leave  work.  Marriage  increases  a  man's  value  to  the 
firm,  because  he  now  has  new  responsibilities  to  shoulder, 
and  is  more  desirous  of  giving  satisfaction  to  his  employer. 

3.  In  general,  men  have  more    initiative  than  women. 

196 


THE   LABOR   FORCE  197 

Man's  initiative  is  not  due  to  superior  brains,  but  is  the 
result  of  greater  opportunity.  In  the  city,  night  schools, 
Young  Men's  Christian  Associations,  correspondence  schools, 
and  public  schools  offer  inducements  in  the  way  of  courses 
of  study  which  men  can  pursue  during  their  evening  hours. 
These  courses  of  study  are  designed  primarily  for  men's 
needs  in  industry.  A  great  number  of  the  evening  schools 
inform  the  employers  of  the  progress  their  hands  are  making 
in  the  courses,  and  the  employer  is  consequently  apt  to  give 
such  persons  greater  opportunities.  Women  in  the  same  lines 
of  occupation  do  not  have  the  same  encouragement,  they  are 
less  able  physically  to  work  all  day  in  the  mill,  and  then  to 
carry  on  technical  studies  after  working  hours.  There  is  a 
lack  of  incentive  to  attend  these  courses,  because  they  do  not 
in  most  cases  regard  their  work  as  a  life's  career.  Moreover, 
thousands  of  women  and  girls,  after  they  leave  their  factory 
at  the  close  of  the  day,  have  household  duties  to  perform  for 
parents  or  for  the  male  members  of  the  household,  who  are 
also  engaged,  perha]3s  in  the  same  mill  or  factory.  Even  if 
they  do  not  engage  in  those  duties,  a  girl  invariably  has  a 
great  deal  more  to  do  than  a  man;  she  usually  makes  much 
of  her  clothing,  often  trims  her  hats,  repairs  her  garments, 
and  looks  after  a  thousand  and  one  things  which  a  man 
turns  over  to  some  one  else  and  pays  for  having  done.  All 
these  things  combine  to  make  man  possess  more  initiative. 
He  has  more  opportunity  to  learn  how  to  do  harder  things, 
has  a  better  physique,  a  greater  incentive  to  make  an  effort 
to  learn,  and  less  of  other  things  to  do. 

4.  Woman's  clothing  is  a  hindrance  to  her,  and  she  can 
be  employed  only  in  places  where  the  machinery  is  of  such 
a  nature  that  her  clothing  will  make  employment  safe.  In 
places  where  she  could  otherwise  be  more  serviceable  than  a 
man,  firms  take  the  trouble  to  design  the  work-room  and 
machinery  in  such  a  manner  that  she  can  be  employed  with 
safety. 


198     THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

5.  Women's  hours  of  labor  are  more  closely  restricted  by- 
law. Our  labor  laws  justly  seek  to  throw  more  protection 
around  women  and  children  than  around  men.  The  manager 
of  a  plant,  however,  cannot  afford  to  overlook  the  fact  that 
these  are  disadvantages  when  he  considers  women  as  prospec- 
tive employees,  although  it  is  only  a  question  of  time  when 
the  law  will  place  greater  restrictions  upon  male  labor. 
Legislation  and  common  justice  require  conveniences  for 
women  in  wash-rooms,  and  a  supply  of  chairs  for  resting 
during  the  working  period.  Their  hours  of  daily  and 
weekly  labor  are  shortened,  and  they  may  not  l^e  permitted 
to  work  overtime  except  in  rare  and  carefully  guarded  in- 
stances. 

6.  Men  are  more  disposed  to  form  permanent  labor 
unions;  and,  in  this  respect  men  may  be  more  difficult  to 
deal  with  than  women  as  regards  wage  increases.  Women  do 
not  lack  organizing  capacity,  but  they  are  apt  to  regard  their 
industrial  grievances  as  a  temjDorary  inconvenience  not  worth 
the  effort  to  remedy. 

In  the  long  run,  powerful  labor  unions  are  better  for  so- 
ciety than  unorganized  labor.  If  the  laborers  of  all  indus- 
tries are  united  in  their  demands,  no  hardship  is  imposed 
upon  any  manager,  because  all  are  on  the  same  basis.  If, 
however,  one  concern  is  compelled  to  yield  to  certain  de- 
mands which  involve  an  outlay  of  money,  and  its  rivals  are 
not  also  put  to  the  same  trouble  and  expense,  it  is  working 
under  disadvantageous  conditions. 

Although  women  do  not  readily  organize  into  pennanent 
labor  bodies,  in  some  respects  they  are  harder  to  manage 
than  men.  Many  a  successful  foreman  of  men  would  wreck 
his  reputation  if  he  applied  his  methods  to  women.  Tact  is 
required  to  get  good  results  from  the  girl  in  the  factory,  mill, 
or  office. 

7.  Women  have  an  aptitude  for  certain  classes  of  work. 
In  hosiery  mills,  silk  spinning  establishments,  and  a  great 


THE  LABOR   FORCE  199 

many  operations  in  textile  works  which  require  painstaking 
care  and  deftness,  women  are  better  employees.  In  pottery 
works  her  lighter  touch  and  more  appreciative  sense  of  beauty 
are  valuable  assets. 

8.  Women  work  for  less  money  than  men.  Manufac- 
turers and  managers  of  establishments  which  employ  women, 
agree  that  in  the  lines  in  which  they  employ  the  women,  they 
do  so  because  the  same  grade  of  men  would  demand  a  larger 
wage. 

Under  these  conditions,  the  manager  of  the  concern  must 
study  carefully  his  industry  and  the  parts  of  his  industry  to 
see  where  he  can  introduce  female  labor.  In  lines  of  work 
where  it  is  a  question  of  deftness  of  fingers  and  lightness  of 
touch  or  skill  in  running  small  machines,  women  can  be  em- 
ployed to  advantage.  Anyone  who  has  visited  the  National 
Cash  Register  works  will  be  impressed  with  the  proportion  of 
women  and  girls  employed  on  drilling  machines  and  ma- 
chinery, which  finishes  and  prepares  the  small  iron  and  steel 
parts  of  the  register  for  the  assembler's  hands.  Some  electri- 
cal manufacturing  companies  employ  women  exclusively  in 
a  number  of  their  departments.  In  commercial  lines,  large 
firms  employ  several  hundred  women  in  their  bookkeeping 
departments.  In  one  concern  the  entire  bookkeeping  staff  is 
composed  of  women  who  are  under  the  direction  of  a  man 
head  accountant.  Whether  women  or  men  shall  be  employed 
depends  upon  whether  the  work  can  be  adjusted  so  as  to  suit 
the  peculiar  aptitudes  of  women. 

Child  Labor. — In  some  classes  of  industries  children 
may  be  employed.  The  child  can  be  used  in  a  great  number 
of  operations  in  textile  plants,  glass  factories,  coal  breakers, 
and  other  establishments.  Society  pays  a  high  price  for 
child  labor  in  decreased  vitality  and  efficiency  of  its  adults, 
and  is  now  restricting  the  liberty  of  the  manufacturer  to  use 
children.  The  child  as  a  laborer  has  only  one  advantage  to 
the  manufacturer,  that  of  being  cheap.     Against  this  advan- 


200     THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

tage  the  manager  may  well  weigh  the  disadvantages  of  child 
labor. 

1.  Their  hours  of  labor  are  limited  by  law  in  most  states, 
and  in  those  industries  where  children  are  employed  they  are 
apt  to  limit  the  hours  of  the  adults,  or  to  compel  the  manage- 
ment to  make  disproportionate  equipment  for  the  child,  as 
compared  with  the  adult,  departments.  The  adults  are  de- 
pendent upon  the  children  for  their  material,  and  when  the 
child  department  shuts  down,  the  adult  department  may 
have  to  discontinue. 

2.  Children  require  more  careful  overseeing.  They  are 
more  apt  to  destroy  or  spoil  material  than  their  elders,  are 
harder  to  keep  at  work,  and  require  a  greater  degree  of  atten- 
tion and  direction.  Unless  constantly  watched,  their  little 
minds  wander  from  their  tasks.  They  are  full  of  animal 
spirits,  and  when  not  under  observation  will  play  pranks, 
which  cause  production  to  cease,  and  even  frequently  destroy 
goods. 

3.  Children  are  more  careless  about  machinery  than  are 
adults,  and  more  likely  to  be  injured.  They  are  not  safe 
workers  in  a  plant. 

The  casualty  insurance  companies  do  not  as  a  rule  care  to 
insure  children.  Some  companies  refuse  to  accept  risks  upon 
any  child  under  fourteen  years  of  age.^ 

Nearly  every  firm  employs  boys  of  seventeen  and  under 
for  messengers,  elevator  attendants,  and  similar  workers. 
The  only  reason  for  employing  boys  for  such  positions  is 
their  willingness  to  accept  low  wages.  In  spite  of  his  small 
remuneration,  the  boy  is  not  cheap  when  one  considers  his 
unreliability.     Some  firms  have  had  so  much  trouble  with 


^  This  rule,  if  not  already  adopted  by  almost  all  casualty  com- 
panies, soon  will  be  on  account  of  the  general  tendency  of  states 
to  raise  the  minimum  working  age  of  children  to  fourteen  years  or 


THE  LABOR  FORCE  201 

boys  in  filing  rooms,  as  messengers,  and  as  office  assistants 
that  they  are  now  employing  for  such  places  men  who  are 
well  past  middle  life  and  are  getting  better  results.  Such 
men  ask  for  more  wages,  but  they  are  well  worth  the  extra 
pay,  for  they  are  much  more  careful,  reliable,  and  faith- 
ful in  fulfilling  their  duties  than  the  youngsters, 'and  far  less 
upt  to  leave. 

From  the  broad,  social  point  of  view  it  is  a  question 
whether  boys  ought  to  be  engaged  in  such  occupations  as 
messengers,  elevator  attendants,  and  office  assistants.  From 
fourteen  to  eighteen  a  boy  should  be  preparing  for  his  future 
career;  if  he  cannot  attend  school  or  college  he  should  be 
serving  an  apprenticeship  to  some  trade,  or  be  working  at 
something  which  will  enable  him  to  fill  a  place  of  usefulness 
in  some  office,  store,  bank,  or  similar  place  in  later  years. 
Being  an  office,  elevator,  or  messenger  boy,  is  not  giving  him 
this  preparation;  and  he  should  not  be  so  occupied  unless  it 
is  merely  a  temporary  expedient  to  obtain  a  position  which 
will  give  him  a  chance  to  develop  his  faculties  for  greater 
things.  The  engaging  of  men  past  middle  life  for  such 
places,  on  the  other  hand,  confers  a  social  benefit,  and  is 
more  satisfactory  to  the  employer,  all  things  being  consid- 
ered. Besides  making  his  selections  of  laborers  along  the 
lines  of  sex  and  age  considerations,  the  manufacturer  must 
consider  the  educational  qualifications  of  his  employees. 

Classes  of  Laborers. — All  industries  require  one  or 
more  of  three  classes  of  laborers  as  regards  mental  caliber, 
education,  and  training. 

I.  Unskilled  Workers. — In  the  continuous  industry  of 
the  synthetic  type  these  men  are  used  to  a  very  great  degree. 
Large  numbers  of  them  are  required  in  steel  plants  as  la- 
borers around  blast  furnaces,  coke  ovens,  the  steel  furnaces, 
ind  other  departments.  In  previous  years  they  were  more 
*videly  used  than  at  the  present  time.  Some  years  ago  they 
*yere  employed  in  great  numbers  around  paper  mills,  textile 


202    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

establishments  of  all  kinds,  and  other  plants  of  a  similar 
nature,  but  this  type  of  laborer  is  being  largely  eliminated 
from  the  steel  plant,  and  he  is  gradually  passing  away  from 
all  plants  as  a  type  of  worker.  Conveying  machinery  is  now 
so  extensively  used  and  is  so  eSicieat  that  the  unskilled  la- 
borer is  no  longer  profitable.  In  the  steel  plants,  he  is  still 
needed  to  some  extent  to  look  after  coke,  slag,  and  other  ma- 
terials, to  shovel  dirt  and  to  attend  to  cinders,  but  his  days 
are  numbered,  not  only  for  steel  making  and  continuous 
industries,  but  for  every  other  type  of  industry  wherein  the 
only  qualifications  are  strength  and  willingness. 

In  the  analytical  continuous  industries,  great  numbers  of 
these  laborers  are  required  to  perform  the  unpleasant  work  of 
unloading  raw  sugar,  of  cleaning  out  apparatus  around  the 
sugar,  oil,  gas,  and  meat-packing  establishments.  They  are 
also  necessary  as  attendants  in  firing  boilers  and,  before  the 
introduction  of  conveying  machinery,  were  required  to  carry 
the  material  from  department  to  department.  Conveying 
machinery  has  eliminated  the  laborer  as  a  draft  animal,  but 
machinery  has  not  made  it  possible  to  remove  him  from  do- 
ing a  number  of  other  unpleasant  duties.  In  time  it  will, 
and  it  is  distinctly  to  the  management's  interest,  as  well  as 
society's,  to  take  him  away  as  soon  as  possible. 

In  the  assembling  industries,  the  unskilled  worker  was 
formerly  employed  to  transport  the  material  from  the  foundry 
to  the  machine  shop  and  between  departments  in  the  shop. 
He  was  a  necessary  adjunct  around  the  shop  to  pull  on  the 
ratchet  for  drilling  holes,  to  sledge,  to  chip  the  rough  cast- 
ings and  set  the  material  up  on  the  machines  for  the  ma- 
chinist to  finally  adjust,  but  now  the  new  factory  has  the 
overhead  crane  which  reaches  every  part  of  the  shop.  A  hy- 
draulic lift  or  chain  block  can  be  placed  at  every  machine, 
so  the  laborer  is  no  longer  helpful  there.  Likewise,  the  air 
drill,  air  hammer,  riveting  machine,  and  air-chipping  ma- 
chine oake  away  his  job  in  chipping,  riveting,  and  sledging. 


THE   LABOR   FORCE  203 

In  a  word,  this  laborer  is  being  eliminated  to  such  a  degree 
that  he  will  soon  become  extinct. 

II.  The  intermediate  grade  of  lahorer  whose  qualifica- 
tions in  addition  to  regularity  and  good  health  must  be : 

1.  Ability  to  learn  to  handle  machinery  of  a  more  or  less 
semi-automatic  type  without  injury  to  himself. 

2.  A  willingness  to  attend  closely  to  such  machinery,  see- 
ing that  it  is  constantly  running  properly,  and  is  always 
supplied  with  material  to  keep  it  producing. 

3.  Ability  to  keep  the  machinery  in  his  charge  in  good 
running  order. 

There  are  three  types  of  machines: 

(1.)  The  machine  which  needs  an  attendant  merely  to 
keep  it  filled.     Examjjles  of  this  type  of  machine  are : 

(a)  The  endless  screw-conveying  device,  which  mixes  the 
various  grades  of  raw  sugar  and  molasses  so  that  they  become 
semi-liquid,  capable  of  being  pumped  from  a  tank  to  the  top 
of  the  building,  from  whence  they  are  started  on  their  refin- 
ing process. 

(b)  Shears,  punches,  and  other  cutting  devices  used 
around  iron  works,  shipyards,  and  such  establishments  to 
cut  up  scrap  iron,  plates,  punch  rivet  holes,  etc. 

(c)  The  filter  presses  in  oil  works,  potteries,  and  plants 
which  have  straining  or  filtering  processes. 

(d)  A  great  many  automatic  screw-making  machines  and 
nail  cutters.  These  machines  merely  need  a  rod  shoved  in 
at  one  end  from  time  to  time,  or  a  roll  of  steel  wire  occasion- 
ally started  going  through  the  apparatus.  Everything  else  is 
done  completely  by  machinery. 

(2. )  The  machine  that  does  most  of  the  work  but  requires 
an  attendant  to  be  present  to  make  occasional  adjustments 
and  to  see  that  the  machine  is  running  in  such  a  way  that 
the  material  going  through  is  not  being  spoiled.    Examples : 

(a)  The  modern  turret  lathe,  wherein  the  attendant  neer" 
only  put  the  bolt  or  nut  blanks  in  and  see,  that  as  each  gtep 


204    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

is  completed  on  the  machine  the  succeeding  tool  is  applied 
to  do  the  next  step  at  the  proper  time. 

(b)  The  modern  drill  press.  In  some  cases  the  drill  press 
has  a  great  number  of  spindles,  so  that  the  one  machine  turns 
Dut  a  number  of  pieces  of  work  at  the  same  time.  Here  the 
attendant  must  be  constantly  on  the  alert  to  see  that  the  vari- 
ous spindles  are  supplied  with  material  in  order  to  keep  the 
entire  machine  productive. 

(c)  The  modern  loom — an  excellent  illustration  of  this 
t}T)e  of  machine.  The  more  recent  loom  will  stop  whenever 
a  thread  breaks  in  either  direction  in  the  cloth.  The  atten- 
dant must  be  capable  of  tying  the  broken  threads  and  start- 
ing the  loom  at  any  time.  He  must  be  deft  in  handling  the 
material  and  must  not  mix  threads  or  get  them  tangled  in 
the  weaving  process. 

(d)  The  nwdern  spinning  frames  or  spinning  mules. 
These  do  not  require  very  great  skill  on  the  part  of  the  atten- 
dant, but  do  need  adeptness  in  handling  the  fine  threads. 

(e)  The  slotting  and  modern  key- way  cutting  machines 
of  the  machine  shop.  The  attendant  must  adjust  the  feed  or 
rate  of  cutting  to  suit  the  requirements  of  the  material  or  the 
machines,  and  must  be  able  to  select  the  proper  tools  for  the 
various  cuts.  The  tools  are  readily  learned  and  do  not  vary 
with  the  same  material  and  cut,  so  that  after  once  learned 
such  machines  can  be  run  by  an  ordinary  person. 

(3.)  The  third  type  of  machines  requires  great  skill  to 
run  because  such  machines  are  designed  either  to  handle  a 
large  variety  of  work  which  must  be  performed  with  exact- 
ing accuracy  or  they  require  unusual  steadiness  of  nerve  and 
skill  to  operate.     Examples  of  these  machines  are: 

(a)  The  large  lathes  and  milling  machines  in  general 
machine  shops.  These  machines  get  a  great  variety  of  work 
every  day;  sometimes  they  are  used  to  bore  out  cylinders, 
again  to  turn  shafting,  and  in  fact  one  never  can  tell  just 
what  they  may  be  called  upon  to  dQ, 


THE  LABOR  FORCE  205 

(b)  Large  planers  and  shapers  are  another  variety  of 
the  same  class  of  machines.  They  may  be  used  to  cut 
grooves,  smooth  off  the  top  of  plane  surfaces,  finish  the  sides 
of  castings,  and  the  variety  of  castings  they  may  be  required 
to  handle  is  indefinite. 

(c)  Steam  hammers  in  forges,  such  as  make  ship  work 
and  other  heavy  forgings. 

(d)  The  roll  sets  which  make  steel  rails,  structural  iron, 
ship  plates,  and  other  work  of  a  similar  type. 

This  third  class  of  machines  requires  the  services  of  the 
third  class  of  workers  discussed  below. 

III.  A  high  grade  of  slcUled  labor. — The  worker  need  not 
be  of  powerful  j^hysique,  but  he  must  be  in  good  health,  and 
possess  the  following  qualifications : 

1.  Ability  to  interpret  accurately  complicated  instructions 
either  from  blue  prints,  drawings,  or  from  written  or  oral 
communication. 

2.  Ability  to  concentrate  attention  on  details,  to  use  skill 
and  patience  in  accurately  carrying  out,  in  the  concrete  re- 
ality, the  pictured  idea  of  the  inventor  or  engineer. 

This  class  of  laborer  is  the  most  highly  skilled  non-pro- 
fessional group  of  people  in  existence,  and  must  be  well  paid. 
Indeed,  they  frequently  obtain  wages  which  compare  favor- 
ably with  the  salaries  of  teachers  and  the  incomes  of  lawyers, 
doctors,  and  other  professional  men.  They  are  needed  in 
foundries  to  make  complicated  castings,  in  the  pattern  shop 
to  produce  the  patterns  for  the  foundry,  in  the  machine  shops 
to  run  the  large  lathes  and  machines  to  which  jobs  of  varied 
dimensions  are  assigned.  Such  a  man  is  entrusted  with  val- 
uable material,  and  if  he  makes  a  mistake  its  results  are  far- 
reaching.  A  pattern-maker  once  misread  a  drawing,  making 
the  inlet  into  the  condenser  on  the  wrong  side  of  the  condens- 
ing apparatus.  The  pattern  went  through  the  foundry.  The 
casting  came  into  the  machine  shop  and  was  machined  in 
many  parts  before  the  mistake  was  discovered,  and  it  cost 


206    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

the  firm  some  $800  to  rectify  the  error.  In  another  case,  a 
man  in  charge  of  one  of  the  large  lathes  misinterpreted  a 
drawing  and  turned  a  certain  piece  of  material  one  thirty- 
second  of  an  inch  smaller  than  it  should  have  been.  The 
casting  was  some  forty  inches  in  diameter  and  seventy-odd 
inches  in  length.  The  mistake  was  discovered  when  it  was 
attempted  to'  fit  it  into  the  other  parts,  and  it  was  utterly 
■worthless — a  loss  of  several  hundred  dollars  to  the  firm.  It 
is  absolutely  necessary  for  men  holding  such  places  to  be 
thoroughly  equipped.  To  train  a  man  for  this  rank,  he 
must  first  of  all  be  intelligent,  naturally  resourceful,  and  pos- 
sess the  innate  ability  to  visualize  a  described  idea.  To  ob- 
tain the  development  of  these  latent  qualities  the  workman 
must  have : 

1.  A  preliminary  education  of  such  a  degree  that  he  can 
readily  acquire  an  accuracy  in  interpreting  instructions.  In 
a  word,  he  must  have  a  receptive,  active  mind. 

2.  He  must  serv^e  an  apprenticeship.  This  preparation 
must  be  in  shops,  night  schools,  and  other  places  where  he 
can  learn  more  than  the  mere  routine  of  his  tasks.  He  must 
attain  the  attitude  of  mind  that  we  look  for  in  the  profes- 
sional man,  the  ability  to  depend  on  himself  for  carrying  out 
work,  and  an  unwillingness  to  jump  at  conclusions. 

The  great  problem  of  a  manager  in  any  place  is  to  intro- 
duce machiner}'-  and  so  to  arrange  the  work  that  the  unskilled 
worker  will  be  unnecessary,  and  the  call  for  the  highly  skilled, 
man  will  be  small.  Unskilled  exhausting  toil  is  so  monoto- 
nous that  the  employee  can  take  little  or  no  interest  in  his 
duties,  and  the  work  itself  is  so  unprofitable  that  a  concern 
cannot  afford  to  give  a  wage  that  will  encourage  men  to  be 
alert  and  faithful.  The  man  reasons  rightly  that  if  he  gets 
discharged  he  can  get  as  good  a  job  in  another  place ;  and  if 
he  doesn't  find  an  opening,  society  will  give  him  a  living  at 
least,  which  is  little,  if  any,  less  than  he  is  now  getting  out 
of  all  his  exertion. 


THE  LABOR  FORCE  207 

An  OTganizati  n  which  must  have  a  large  number  of  the 
third  class  of  workman,  the  highly  skilled  man,  is  likewise 
undesirable,  not  because  his  services  are  not  valuable,  but 
because  so  much  depends  on  him.  His  grade  is  so  high  that 
it  is  difficult  to  obtain  him.  He  is  well  worth  his  wages  in 
any  organization  if  he  is  efficient  and  does  not  make  mis- 
takes ;  but  if  he  does  err,  even  occasionally,  considerable  loss 
may  be  entailed.  Therefore  it  is  highly  desirable  to  get 
machinery  to  do  as  much  of  his  work  as  possible. 

The  second  class  of  worker  is  the  most  desirable.  The 
advantages  of  this  class  are: 

1.  A  short  apprenticeship  makes  the  man  valuable  to  the 
employer. 

2.  The  employee  with  his  limited  capacity  feels  his  de- 
pendence on  the  employer,  and  is  likely  to  be  a  faithful  and 
attentive  workman  because  he  receives  a  larger  income  than 
the  ordinary  laborer,  and  could  in  most  cases  obtain  employ- 
ment only  as  a  less  valuable  man  in  another  place. 

3.  The  employee  becomes  very  dexterous  in  doing  one 
thing,  and  is  thus  able  to  turn  out  a  large  product. 

It  is  possible  to  run  but  few  plants  without  using  more  of 
the  third  class  than  are  readily  available.  They  are  neces- 
sary as  bosses  and  leaders  of  the  first  and  second  groups,  and 
unfortunately  they  cannot  be  developed  rapidly  from  either 
one  of  them.  Shop  managers  find  themselves  seriously  han- 
dicapped, from  time  to  time,  in  getting  men  who  can  take 
charge  of  departments,  who  can  become  gang  bosses  and  fore- 
men in  the  various  divisions  of  the  organizations.  So  im- 
portant has  the  specialization  of  labor  become  that  the  old 
style  apprentice  in  the  shop  has  almost  completely  vanished. 
A  few  weeks  of  practice  enables  a  man  to  run  a  loom,  but  to 
get  a  good  loom  foreman  a  man  should  come  through  an  ap- 
prenticeship which  has  taught  him  every  part  of  the  loom  and 
its  running  mechanism.  It  takes  a  very  short  time  to  learn 
to  run  a  drill  press  or  milling  machine,  but  it  is  an  excee€^ 
15 


208    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

ingly  hard  proposition  to  get  a  man  who  can  tell  what  classes 
of  work  should  go  on  the  machines,  how  they  should  be  at- 
tached, how  the  tools  should  be  adjusted,  and  a  hundred  and 
one  other  such  matters.  It  requires  little  intelligence  to 
scrape  in  a  valve  seat,  but  it  requires  skill  to  set  the  valves 
of  the  variety  of  engines  that  come  into  some  of  the  large 
general  shops.  So  pressing  has  the  need  of  this  highly 
skilled  class  of  mechanic  become  that  in  sj)ite  of  the  proj&t- 
ableness  of  the  second  class,  corporations  now  make  every 
effort  possible  to  encourage  young  men  to  advance  past  the 
mere  routine  of  making  goods.  A  number  of  large  concerns 
are  devoting  a  great  deal  of  attention  to  the  development  and 
teaching  of  apprentices. 

Apprenticeship. — The  General  Electric  Company  of 
L}Tin,  Massachusetts,  about  1902  put  into  operation  an  ap- 
prenticeship system  which  has  proven  to  be  beneficial  both 
to  the  firm  and  the  employees.  They  organized  a  special  de- 
pai"tment  devoted  entirely  to  the  training  of  apprentices.  This 
department  was  put  under  the  direct  control  of  a  superinten- 
dent, who  was  especially  qualified  to  teach  young  men  the 
principles  of  their  trades.  The  company  also  established 
class  rooms  in  the  factory  in  which  the  boys  are  taught 
drawing,  and  are  given  instruction  in  engineering  science. 
The  training  received  by  a  student  at  Lynn  is  so  broad  "that 
the  graduate  apprentice  is  prepared  to  fill  a  position  as  a 
skiPed  journeyman  or  as  industrial  foreman  in  any  mechani' 
cal  establishment. ' '  ^ 

The  Baldwin  Locomotive  Works  of  Philadelphia  is  an- 
other well-knowTi  firm  which  has  established  an  apprentice- 
ship system.  They  have  not,  however,  set  apart  a  separate 
school  or  department  for  the  training  of  the  young  men.  A 
learner  goes  into  the  various  shops  and   departments  and 

1  The  Annals  of  the  American  Academy  of  Political  and  Social 
Science^  Vol.  XXXIII,  No.  1,  January,  1909,  p.  143. 


THE   LABOR   FORCE  209 

gathers  knowledge  and  experience  from  things  as  they  actu- 
ally go  on  in  the  usual  course  of  events  in  the  works.  In 
order  to  provide  for  several  classes  of  apprentices  they  have 
made  provision  for  three  classes  of  applicants. 

Ap2)r entices  of  the  First  Class. — The  first  class  includes 
boys  of  seventeen  years  of  age  who  have  had  a  good  common 
school  education,  and  who  bind  themselves  by  indentures 
(with  the  consent  of  a  parent  or  guardian  in  each  case)  to 
serve  four  years;  to  be  regular  at  their  work;  to  obey  all  or- 
ders given  them  by  the  foreman  or  others  in  authority ;  to 
recognize  the  supervision  of  the  firm  over  their  conduct  out 
of  the  shop  as  well  as  in  it;  and  to  attend  such  night  schools 
during  the  first  three  years  of  their  apprenticeship  as  will 
teach  them,  in  the  first  year,  elementary  algebra  and  geome- 
try; and  in  the  remaining  two  years,  the  rudiments  of  me- 
chanical drawing. 

Apprentices  of  the  Second  Class. — The  second-class  in- 
denture is  similar  to  that  of  the  first  class,  except  that  the 
apprentice  must  have  had  an  advanced  grammar  school  or 
high-school  training,  including  the  mathematical  courses 
usual  in  such  schools.  He  must  bind  himself  to  serve  for 
three  years,  and  to  attend  night  schools  for  the  study  of  me- 
chanical drawing,  at  least  two  years,  unless  he  has  already 
sufficiently  acquired  the  art. 

Ajjprentices  of  the  Third  Class. — The  third-class  inden- 
ture is  in  the  form  of  an  agreement  made  with  persons 
twenty-one  years  of  age  or  over,  who  are  graduates  of  col- 
leges, technical  schools,  or  scientific  institutions,  having 
taken  courses  covering  the  higher  mathematics  and  the  nat- 
ural sciences,  and  who  desire  to  secure  instruction  in  practi- 
cal shop  work. 

The  indenture  or  agreement  in  each  case  obligates  the 
company  to  teach  the  apprentice  his  art  thoroughly  and  to 
furnish  him  opportunity  to  acquire  a  practical  knowledge  of 
mechanical  business.     The  finn  is  also  bound  to  retain  the 


210    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

apprentice  in  service  until  he  has  completed  the  terms  of  the 
indenture  or  agreement,  provided  his  services  and  conduct 
are  satisfactory.  In  all  cases  the  firm  reserv^es  the  right  to 
dismiss  the  apprentice  for  cause. 

The  rates  of  pay  in  the  different  classes  are  as  follows : 

1st  year         2d  year       3d  year     4th  year 
per  hr.  per  hr.        per  hr.      per  hr. 

Apprentices  of  the  First  Class 7c.  9c.  lie.  13c. 

Apprentices  of  the  Second  Class 9c.  lie.  13c. 

Apprentices  of  the  Third  Class 16c.  20c. 

In  addition  to  the  rates  mentioned  above,  apprentices  of 
the  first  class  each  receive  an  additional  sum  of  $125,  and 
apprentices  of  the  second  class  an  additional  sum  of  $100, 
at  the  expiration  of  their  full  term  of  apprenticeship. 

By  the  course  of  training  provided  for  in  this  system,  it 
is  believed  that  a  great  benefit  will  accrue  to  the  mechanic 
as  well  as  to  the  employer.  To  young  men  who  have  received 
a  thorough  technical  education,  the  two  years'  course  in  shop 
work  is  especially  recommended.^ 

Mr.  N.  W.  Sample,  superintendent  of  apprentices  in  the 
Baldwin  Locomotive  Works,  states  that  the  system  has  proven 
quite  satisfactory^. 

"Three  years  after  the  first  indentured  apprentice  completed  his 
term,  there  were  employed  over  two  hundred  graduated,  first- 
class,  all-round  mechanics  capable  of  assignment  to  any  shop,  and 
of  this  number  fifty  occupied  places  of  responsibility  as  heads  of 
departments,  foremen,  assistant  foremen,  contractors,  and  leading 
workmen.  It  is  no  longer  necessary  to  go  outside  of  the  works 
for  any  talent  desired."  ^ 

The  Westinghouse  Electric  and  Manufacturing  Company 
is  another  firm  which  is  laying  much  stress  upon  the  proper 

1  Circular  No.  3,  Apprenticeship  System,  Baldwin  Locomotive 
Works. 

-  The  Annals  of  the  American  Academy  <ff  Political  and  Social 
Science.  Vol.  XXXIII.  No.  1,  January,  1909,  p.  177. 


THE  LABOR  FORCE  21\- 

development  and  training  of  young  men  for  their  works. 
They  have  two  apprenticeship  systems,  that  of  the  Trades  and 
that  of  the  Engineering,  The  former  is  designed  for  young 
men  Avho  have  not  had  a  technical  education.  The  latter 
is  intended  for  graduates  of  technical  schools  and  colleges. 
The  Trades  Apprentices  are  recruited  from  young  men 
between  the  ages  of  16  and  23  years.  All  under  21  years 
must  have  their  parents'  or  guardians'  consent  embodied  in 
the  agreement  which  is  made  with  the  company.  The  term 
of  service  for  the  Trades  Apprentice  is  four  years,  while  that 
of  the  engineering  class  is  two. 

The  company  is  generous  in  its  treatment  of  the  men. 
They  are  given  veiy  fair  remuneration  during  their  term  of 
service,  and  are  promoted  from  task  to  task  as  their  capabil- 
ities develop.  The  promotions  are  accompanied  by  graded 
increases  in  wages.  The  trades  apprentices  are  started  at  9 
cents  per  hour,  and  at  the  end  of  each  year  receive  an  increase 
of  3  cents  per  hour  until  they  complete  their  term.  The  en- 
gineering men  are  started  at  18  cents  per  hour,  for  which 
sum  they  work  one  year  of  the  time,  or  2,740  hours.  After 
this  first  year  of  service,  they  are  remunerated  at  the  rate  of 
20  and  22  cents  per  hour,  the  former  rate  being  granted  for 
the  first  six  months  of  the  second  year,  and  the  latter  being 
for  the  next  six  months. 

The  firm  takes  care  that  the  young  men  to  whom  they 
grant  the  privileges  of  apprenticeship  have  the  fundamental 
training  and  native  ability  to  make  proper  use  of  the  oppor- 
tunities. Those  who  desire  to  become  enrolled  in  the  work 
are  obliged  to  make  application  in  their  o^ti  handwriting, 
and  must  tell  their  father's  name,  state  his  business,  they 
must  give  their  name,  age,  height,  weight,  educational  and 
other  training,  the  foreign  languages  they  speak,  the  degrees 
they  have  received,  and  the  schools  or  colleges  they  have 
attended,  and  no  one  is  considered  who  does  not  submit  a 
recent  photograph. 


212    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

While  they  are  serving  their  time  an  exact  record  is  kept 
of  their  conduct  and  performance  within  the  plant;  and,  if 
they  are  trade  apprentices,  their  outside  night  school  work  is 
carefully  graded  and  recorded.  They  are  marked  for  work- 
manship), personality,  and  outside  class  work.  A  young  man 
has  an  incentive  to  do  his  best  in  every  department ;  because, 
if  at  any  time  he  becomes  incompetent  through  neglecting 
his  work  or  studies,  or  is  insubordinate,  he  is  liable  to  dis- 
missal. Dismissal  means  he  loses  both  a  job  and  a  chance 
to  better  his  future  condition.  If  he  honorably  completes  the 
term  of  service,  the  firm  in  the  case  of  trade  apprentices  pre- 
sents a  substantial  reward  in  the  form  of  $100  and  a  diploma, 
which  tells  the  world  that  he  is  competent  to  follow  some 
definite  line  of  work.  The  engineering  apprentices  receive 
no  gratuity,  but  obtain  certificates. 

Nothing  so  clearly  indicates  our  progress  both  in  the~in- 
dustrial  and  educational  fields  as  do  these  highly  organized 
apprenticeship  systems.  This  development  has  taken  place 
within  the  last  ten  years.  Indeed  it  is  not  that  long  since 
apprentices  in  some  places  were  started  in  at  $2  per  week, 
and  raised  a  dollar  or  so  every  year  until  they  were  earning 
a  weekly  wage  of  $6  by  the  time  their  terms  expired.  In 
the  older  shops,  his  training  depended  very  largely  upon  the 
caprice  of  his  foreman  and  his  own  assertiveness.  If  he  were 
wide  awake  and  insistent  upon  getting  acquainted  with  all 
classes  of  work  which  went  on  in  the  shop,  he  would  get  a 
good  training.  If,  however,  he  were  not  a  favorite  or  a  for- 
ward kind  of  youngster  he  would  frequently  secure  a  poor 
training  for  a  future  career. 

The  writer  knows  of  one  plant  which  still  has  the  old  style 
of  apprenticeship  contract,  and  the  trouble  it  has  had  to  find 
competent  foremen,  gang  bosses,  and  workmen  is  evidence 
that  a  far-sighted,  generous  policy  is  the  most  profitable. 

Individual  Ability. — Xo  firm  can  hope  to  be  successful 
if  it  is  dependent  upon  unusual  ability  of  any  considerable 


THE  LABOR  FORCE  213 

portion  of  its  workers.  A  large  number  of  fimis  whose  work 
is  of  luch  a  nature  that  a  formal  system  of  indenture  is  inad- 
visable or  impossible  have  adopted  the  policy  of  supplying 
an  understudy  of  some  kind  to  every  man  who  has  charge  of 
a  department  containing  a  number  of  men.  This  assistant 
or  helper  is  expected  to  acquaint  himself  with  all  the  duties 
of  his  chief,  and  is  supposed  to  act  in  his  absence.  In  this 
way  the  plant  is  never  at  a  loss  to  fill  any  position  which 
may  be  vacated  in  any  department.  One  large  organization 
engaging  some  40,000  employees  will  not  promote  one  from 
a  lower  to  a  higher  position  unless  that  same  man  has  trained 
a  subordinate  to  fill  his  position.  This  insures  to  the  firm 
available  workers  for  every  possible  position,  and  it  also  has 
a  tendency  to  develop  a  very  friendly  feeling  between  the 
heads  of  departments  and  their  assistants,  because  the  de- 
partmental head  sees  that  it  is  to  his  distinct  interest  to  have 
capable  subordinates. 

Another  firm  takes  the  attitude  of  fearing  the  coming 
man.  Every  foreman  or  division  head  likes  to  impress  all  of 
the  superior  officers  with  the  idea  that,  if  he  leaves,  the  de- 
partment will  suffer.  In  a  measure  he  speaks  the  truth,  be- 
cause those  individuals  take  care  to  have  subordinates  who 
possess  few  of  the  larger  qualities  needed  by  men  of  initia- 
tive. The  finn  as  a  consequence  is  terribly  handicapped,  and 
as  is  to  be  expected,  the  work  in  the  departments  is  so 
unsatisfactorily  performed  that  every  few  years  there  is  a 
general  "shake-up"  in  the  plant,  entailing  the  resignation 
and  dismissal  of  a  large  number  of  the  departmental  heads. 
Thus  the  short-sighted  policy  pursued  by  every  one  in  the 
plant  to  hold  his  job  is  the  very  thing  that  is  hindering  his 
personal  advancement  and  the  general  prosperity  of  the  firm. 
This  concern  has  not  paid  a  dividend  on  its  stock  for  more 
than  a  half  dozen  years,  while  the  former  company's  stock 
has  averaged  7  per  cent  for  a  generation. 


CHAPTER  XV 

THE  PAYMENT  OF  THE  WORKMAN 

Ix  order  to  get  the  maximum  product  from  any  set  of 
employees,  the  manager  must  consider: 

1.  The  best  methods  of  keeping  the  men  employed  at 
their  maximum  limit  while  within  the  plant. 

2.  The  best  methods  of  making  their  work  accurate. 
When  one  establishes  a  wage  scale  he  should  have  those 

two  objects  in  mind. 

The  greatest  incentive  a  man  can  have  to  work  faithfully 
is  to  be  paid  according  to  some  scheme  whereby  his  remu- 
neration is  directly  proportional  to  his  output.  How  to  estab- 
lish a  wage  scale  which  will  yield  this  maximum  output  for 
a  minimum  wage  cost  is  a  problem  that  has  troubled  man- 
agers for  years. 

The  oldest  scheme  of  wage  payment  is  to  pay  the  worker 
a  certain  fixed  sum  for  the  time  he  is  employed  in  the  plant. 
In  the  hands  of  a  vigorous  overseer  thoroughly  conversant 
with  all  the  work  in  the  plant,  the  time  system  proves  satis- 
factory provided  the  plant  is  so  small  that  the  foreman  in 
charge  can  keep  in  constant  touch  with  all  that  is  going  on. 
From  the  employer's  point  of  view  it  might  appear  that 
nothing  can  be  more  perfect  than  the  time  system  of  wage 
payment;  because  every  increase  in  output  that  the  man 
makes  means  an  absolute  gain  to  the  owner  of  the  plant. 
The  curves  A  A'  in  Fig.  24  show  how  increased  exertion 
contributes  to  the  j)rofits  of  the  firm;  the  employee  gets  the 
same  compensation  whether  he  does  one  piece  or  a  hundred, 
while  the  employer  can  see  with  glowing  satisfaction  his 
wage  cost  per  unit  dropping  downward.     There  is  but  one 

2L4 


THE   PAYMENT   OF  THE  WORKMAN  215 

difficulty  with  which  the  employer  must  contend  in  this  re- 
munerative scheme.  The  employee  will  not  give  his  best 
efforts  so  long  as  added  exertions  do  not  bring  immediate 
returns.  The  only  tangible  encouragement  a  man  has  in  the 
time  system  is  that  his  rate  of  pay  will  be  increased  from 
time  to  time  as  he  demonstrates  his  worth.  In  a  large  shop 
it  is  impossible  for  a  foreman  to  be  in  such  intimate  contact 
with  all  the  men  that  he  can  make  wage  adjustments  that 
will  be  strictly  fair  to  each  individual.  It  is  hard  to  measure 
the  efficiency  of  a  man  by  his  general  attitude  or  by  his  talk. 
Some  of  the  best  talkers  and  apparently  most  industrious 
workers  may  be  confirmed  loafers  and  the  least  efficient  men 
in  the  firm's  employ. 

The  only  practicable  way  of  establishing  a  satisfactory 
time-rate  system  is  to  divide  the  men  into  groups  or  classes 
and  fix  a  maximum  and  minimum  rate  for  these  classes.  If 
a  man  is  valuable  he  may  get  his  wages  raised  to  the  maxi- 
mum within  the  class,  or  he  may  be  advanced  to  another 
class.  The  wages  are  fixed  by  bargain  between  the  men  and 
the  employer.  This  bargaining  may  be  done  either  collec- 
tively at  the  dictation  of  a  labor  union,  which  fixes  mini- 
mum wage  rates,  or  it  n^y  be  done  by  the  individual  work- 
men fixing  their  wages  with  the  foreman.  At  best,  the  wage 
adjustment  is  largely  guesswork  so  far  as  rewarding  individ- 
ual men  for  what  they  do. 

Unless  there  is  some  means  of  measuring  what  a  man 
does,  it  is  unsafe  to  depend  upon  personal  likes  and  dislikes. 
Here  lies  the  inherent  weakness  of  the  time-rate  system.  A 
foreman  will  often  raise  wages  not  because  a  man  actually 
produces  more,  but  because  he  thinks  the  man  more  efficient. 
Managers  in  plants  have  long  appreciated  the  fact  that  there 
should  be  a  different  method  of  fixing  standards  of  wage 
payment  than  on  the  basis  of  personal  conjecture. 

The  average  man  is  not  inclined  to  overexertion.  Fre- 
quently his  chief  aim  seems  to  be  to  do  the  least  amount  of 


216    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

work  necessary  to  keep  from  getting  discharged  or  being  re- 
duced in  pay.  Foremen  are  much  annoyed  and  firms  lose 
thousands  of  dollars  through  the  idleness  of  men  from  one 
cause  or  another.  A  great  deal  of  this  lack  of  energy  on  the 
part  of  the  men  is  not  due  to  wilful  idleness  but  to  oversight 
on  the  part  of  the  foremen.  Men  will  frequently  get  a  job 
completed  and  wait  with  perfect  complacency  until  the  fore- 
man comes  to  them  with  another  task.  In  some  poorly  run 
shops  men  waste  as  much  as  half  a  day  waiting  for  the  fore- 
man to  find  out  that  they  are  ready  for  a  new  job.  There  are 
also  other  kinds  of  time  losses.  Men  will  frequently  wilfully 
kill  time  in  order  to  make  work  last.  Machines  will  not  be 
run  to  their  maximum  capacity  because  to  do  so  will  finish  a 
job  so  long  before  quitting  time  that  it  will  be  necessary  to 
lift  off  the  piece  and  adjust  another  about  the  time  the  whistle 
blows.  One  will  sometimes  see  men  in  day-rate  shops  actu- 
ally make  their  machines  run  without  doing  anything  at  all 
in  order  to  appear  to  be  working  and  so  do  away  with  the  ne- 
cessity of  changing  a  job  at  some  inconvenient  time.  Man- 
agers of  plants  are  not  ignorant  of  these  conditions.  The 
wilful  dishonesty  and  lack  of  willing  cooperation  on  the  part 
of  the  employees  have  made  the  daily  wage  system  a  poor 
means  of  remuneration  for  many  kinds  of  work.  Wide-awake 
men  rightly  reason  that  if  a  scheme  could  be  devised  by 
which  workmen  lose  money  for  idle  time,  they  would  not  be 
so  inclined  to  sit  with  bovine  patience  until  their  foreman 
finds  them  out  of  work  and  starts  them  on  another  task, 
neither  would  they  be  apt  to  waste  time  wilfully  in  order  to 
start  new  work  at  a  more  convenient  season  or  to  save  a  job 
when  work  is  getting  low  in  the  shop. 

It  is  rational  to  assume  that  the  remuneration  for  labor 
should  be  on  the  basis  of  all  ordinary  commercial  transac- 
tions, that  the  man  should  be  paid  for  what  he  does,  that 
compensation  should  be  by  the  piece-rate  system.  There  can 
be  no  morei  effective  way  to  prevecj  idleness,  because  the 


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Fig.  24.— Comparison  of  the  Time-Rate  and  Piece-Rate  Systems. 


218    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

idler  is  fully  as  much  a  loser  as  the  firm.  Viewed  from  the 
workman's  standpoint,  there  can  be  no  more  profitable  means 
of  remuneration.  Fig.  24,  on  lines  BB^  shows  that  on  the 
piece-rate  system  of  wage  payment  a  man  automatically 
raises  his  hourly  rate  by  increasing  the  output.  The  firm 
apparentl}''  does  not  gain  directly  from  the  increased  effort, 
as  is  shown  by  the  fact  that  the  wage  cost  per  piece  is  a  con- 
stant quantity.  (See  lines  B'  B',  Fig.  24. )  From  the  dia- 
gram one  would  conclude  that  the  piece-rate  system  of  wage 
payment  would  be  a  system  strongly  advocated  by  the  work- 
man. The  opponents  of  the  piece-rate  system  are  not  the 
employers,  but  the  men.  Their  opposition  is  based  upon 
good  reason,  and  yet,  from  the  employer's  point  of  view,  it 
is  ahnost  impossible  to  eliminate  the  objection.  To  fix  piece 
rates  one  must  be  guided  by  the  capabilities  of  the  em- 
ployees. When  managers  introduce  the  scheme  they  try  to 
be  fair  to  the  men  and  estimate  the  time  it  will  take  to  per- 
form certain  tasks  on  the  basis  of  previous  time  records  made 
by  men  employed  on  the  day-rate  system.  These  records  are 
from  the  very  nature  of  the  case  inaccurate,  and  it  is  found 
invariably  that  nearly  every  one  underestimates  the  work- 
man's efficiency  when  he  has  an  incentive  so  great  as  that 
offered  by  the  piece-rate  system.  In  some  cases  the  output 
of  the  workman  will  increase  seven  and  eight  times  his  esti- 
mated maximum. 

Under  these  conditions  the  manufacturer  finds  he  is  often 
paying  extravagant  prices  for  labor  which  is  either  unskilled 
or  semi-skilled  in  type.  In  these  competitive  days,  he  can- 
not afford  to  pay  exorbitant  daily  wages  to  men  whose  train- 
ing is  of  a  low  order,  because  his  competitors  will  soon  adopt 
a  daily  wage  or  a  piece-rate  schedule  of  a  very  much  lower 
wage  standard.  The  result  is  that  the  piece-rate  system  of 
wage  payment  in  industries,  which  have  not  been  thoroughly 
standardized  and  developed,  has  been  found  exceedingly  un- 
satisfactory, because  the  workmen  consider  it  unfair  to  cut 


THE  PAYMENT  OF  THE  WORKMAN      219 

their  rates,  and  the  managers  find  it  ahnost  impossible  to 
establish  a  rating  which  will  be  satisfactory  to  themselves 
and  to  the  employees  without  considerable  adjustment. 

The  breakdown  of  the  piece-rate  system  is  due  to  the  fact 
that  it  is  impossible  to  adjust  rates  without  friction.  The 
men  consider  every  reduction  of  the  piece  rate  an  illustration 
of  the  employers'  greed,  while  the  employers  feel  that  the  in- 
creased output  is  another  example  of  how  grossly  employees 
have  deceived  them  in  the  past  in  order  to  mislead  them  into 
paying  excessive  wages.     Both  sides  feel  disgruntled. 

Employers  who  have  experimented  with  this  system  and 
have  discovered  the  skill  a  laborer  possesses,  have  endeavored 
to  apply  the  theory  of  giving  a  large  incentive  to  some  one 
who  can  guide  and  direct  the  men  and  yet  pay  these  workers 
a  day  rate.  There  are  plants  in  this  country  Avhich  apply 
this  scheme,  and  call  it  the  Contract  System.  The  foremen 
in  charge  are  given  a  certain  price  for  the  work  they  do,  they 
hire  and  direct  the  men,  usually  paying  them  on  a  day  basis, 
and  fixing  their  wages  at  the  lowest  possible  point  the  men 
will  agree  to  take.  Under  the  contract  system  of  working, 
the  foremen  have  their  income  based  upon  the  work  they  can 
get  from  these  men.  The  scheme  has  a  tendency  to  develop 
a  body  of  alert  overseers  who  are  always  after  the  men  to  see 
that  they  are  not  wasting  time  either  through  laziness  or  by 
incompetence.  The  system  when  it  operates  makes  men 
work,  but  it  has  the  unpleasant  disadvantage  of  developing 
slave-driving  habits.  Many  men  will  not  stand  for  such 
treatment;  and  unless  the  work  is  of  such  a  nature  that  a 
rather  low  type  of  worker  can  be  employed  and  taught  the 
tasks  to  be  done,  the  company  is  liable  to  have  a  great  deal 
of  trouble  with  its  labor  under  this  contract  system,  although 
in  some  plants  it  has  worked  successfully  for  many  years. 

Mr.  Henry  R.  To^\Tie,  a  number  of  years  ago,  conceived  a 
scheme  which  has  had  a  profound  influence  upon  pay  sys- 
tems, because  he  introduced  an  incentive  rather  than  a  coer- 


220    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

cive  process  to  get  men  to  increase  their  exertions.*  His 
Bcheme  is  briefly  this — find  out  what  has  been  the  average 
cost  for  a  given  amount  of  output  in  the  best  year  before  he 
introduced  the  system.  \\'ith  this  as  a  unit  he  determines 
what  the  labor  cost  for  the  same  quantity  has  been  for  each 
succeeding  year.  The  difference  in  labor  cost  between  the 
two  gives  him  the  savings  made  for  the  fimi  by  the  extra 
effort  of  the  labor  force.  This  saving  he  distributes  in  the 
following  way:  50  per  cent  is  retained  by  the  firm,  10  i>qy 
cent  is  given  to  the  foremen  in  charge  of  the  work  as  an 
inducement  to  them  to  get  men  to  increase  output,  40  per 
cent  he  distributes  to  the  gang  bosses  and  workmen  through- 
out the  j)lant  on  the  basis  of  their  annual  wages.  The  re- 
muneration is  given  at  the  end  of  the  year  or  at  the  end  of 
some  considerable  length  of  time  shorter  than  a  year. 

This  sharing  of  the  gain  with  the  men  has  in  it  a  num- 
ber of  defects,  the  most  important  of  which  are : 

1.  The  reward  is  remote. 

2.  The  method  of  division  is  not  likely  to  encourage  great 
activity  because  the  men  do  not  receive  shares  in  proportion 
to  their  individual  efforts. 

Some  writers  have  criticised  the  system,  because  it  makes 
the  men  share  gains  which  they  say  may  be  due  to  improved 
methods  of  work  or  to  better  management.  There  may  be 
some  basis  for  this  statement,  but  Mr.  Towne's  paper  dis- 
tinctly stipulates  that  the  books  shall  be  so  kept  that  any 
improvements  in  management  will  not  be  shared  by  the 
workmen  save  in  so  far  as  they  actively  assist  in  the  work. 
The  paper  specifically  notes  that  it  is  only  fair  to  share  with 
the  operatives  the  savings  which  their  activity  makes  for  th<^ 
firm. 

The  remoteness  of  the  reward  and  the  method  of  division 


^  Transactions  American  Society  of  Mechanical  Engineers,  Vol. 
X,  p.  600,  No.  341,  "Gain  Sharing,"  by  Henry  R.  Towne. 


THE  PAYMENT  OF  THE  WORKMAN      221 

are,  however,  serious  objections,  and  these  Mr.  F.  A.  Halsey 
circumvented  when  he  presented  the  premium  plan  of  remu- 
nerating labor.'  Mr.  Halsey  believed  with  Mr.  Towne  that 
the  workman  should  be  rewarded  only  in  so  far  as  his  actions 
lower  production  costs.  He,  however,  appreciates  the  fact 
that  a  much  better  incentive  will  be  given  to  men  if  they  are 
paid  at  once  their  exact  share  of  all  the  profit  they  make. 
His  scheme  is  briefly  this : 

A  man  is  given  a  certain  rate  per  hour.  A  piece  of  work 
is  assigned  to  him  which  will  be  allowed  a  certain  number  of 
hours  time  in  which  to  l^e  done.  If  the  man  performs  the 
work  in  a  shorter  time,  .he  will  be  given  a  fixed  percentage  of 
the  value  of  the  time  saved.  This  extra  sum  w411  be  paid  to 
him  as  a  premium  to  his  wages,  and  on  that  account  the 
Halsey  scheme  is  called  the  Premium  Plan  of  Kemunerating 
Labor.  The  idea  of  the  scheme  is  to  establish  the  shop  on  a 
piece-rate  system,  in  which  the  men  will  be  guaranteed  a 
certain  daily  wage.  If  the  management  has  fixed  the  price 
of  the  unit  of  work  performed  at  too  high  a  figure  the  work- 
man will  share  his  extra  productive  value  with  the  manufac- 
turer in  a  manner  that  will  not  require  the  cutting  of  the 
rate.  In  a  word,  by  dividing  the  gains  due  to  his  extra  pro- 
ductivity, both  the  manufacturer  and  the  worker  profit,  and 
the  worker  will  have  no  reason  to  limit  his  output  because 
there  will  be  no  rate  cutting. 

The  lines  AA,  Fig.  25,  show  how  by  this  system  a  man 
increases  his  hourly  wage  in  a  very  material  way  by  increas- 
ing his  productivity.  At  the  same  time  he  cuts  the  unit 
price  per  piece  considerably  for  the  firm.  (See  lines  A' A', 
Fig.  25.)  The  figure  shows  just  how  Mr.  Halsey  manages 
to  make  unnecessary  any  cuts  in  the  unit  rate.     By  his  sys-' 


^  Transactions  American  Society  of  Mechanical  Engineers,  Vol. 
XII,  p.  755,  "Premium  Plan. of  Paying  for  Labor,"  by  F.  A, 
Halsey. 


222    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

tern,  the  workman  by  increasing  his  wages  actually  cuts  the 
cost  of  production.  His  only  method  of  obtaining  a  big 
reward  is  to  cut  the  unit  cost.  Thus  the  employer  has  a 
decided  advantage.  If  we  look  at  the  other  term  of  the  con- 
tract we  find  that  the  workman  is  guaranteed  a  standard  daily 
wage,  so  that  he  can  feel  that  he  is  not  on  the  piece-rate  sys- 


ISO 

I3S 


>lALSEr  PREMIUM  PLAN 


O      i      Z  \3     A     S     &      7     S      9     to 

Fig.  25.— Comparison  of  Halsey  and  Rowan  Premium  Plans. 

tem.  If  the  price  per  unit  has  been  set  too  low,  he  is  not 
compelled  to  overexert  himself  in  order  to  make  a  fair  daily 
wage. 

The  advantages  of  the  Halsey  system  are : 

1.  The  men  are  encouraged  to  produce  more  by  being 
rewarded  in  proportion  to  what  they  do. 


THE  PAYMENT  OF  THE  WORKMAN      223 

2.  The  reward  is  immediate  and  substantial. 

3.  The  employer,  in  sharing  the  gains  of  the  extra  exer- 
tion on  the  part  of  the  worker,  does  not  have  the  necessity  of 
cutting  the  rate  in  an  arbitrary  manner,  hence  the  workman's 
mind  is  relieved  of  tlie  fear  of  having  his  wages  reduced 
arbitrarily. 

A  British  modification  of  the  system  was  put  into  opera- 
tion by  David  Rowan  &  Company.  Mr.  Rowan's  wage 
curve  is  plotted  B  B  an  the  same  diagram  (Fig.  25),  which 
shows  Mr.  Halsey's  premium  plan,  while  the  Rowan  piece 
cost  is  shown  as  line  B'  B'  on.  the  same  diagram.  Accord- 
ing to  Mr.  Rowan's  idea,  if  a  job  has  been  allotted  too  much 
time,  even  with  the  Halsey  system,  a  man  may  get  a  remu- 
neration out  of  all  proportion  to  the  value  of  the  work.  For 
example,  if  a  man  should  be  allotted  one  hour  to  do  a  piece 
of  work  worth  30  cents,  and  if  he  should  increase  his  pro- 
ductivity ten  times,  with  the  Halsey  system  he  would  get 
$1.20  an  hour.  This  is  considerably  better  for  the  firm  than 
his  hourly  rate  would  be  with  straight  piece  work.  The  lat- 
ter cost  would  be  $3  an  hour.  (See  Fig.  25.)  Mr.  Rowan 
believes,  however,  that  even  Mr.  Halsey's  scheme  is  too 
extravagant  in  its  reward,  so  he  devised  a  plan  of  so  adjust- 
ing the  premium  that  every  increase  in  wages  should  be  equal 
to  the  percentage  the  operator  saves  on  the  time.  For  ex- 
ample, if  a  job  is  allotted  one  hundred  hours  and  the  man's 
rate  is  30  cents  per  hour,  the  cost  of  the  work  would  be  $30. 
If  he  does  the  job  in  ninety  hours,  with  his  hour  rate  30 
cents,  the  time  wages  on  the  job  would  be  $27.  He  has 
saved,  however,  10  per  cent  of  the  time,  and  gets  a  10-per- 
cent increase  in  wages  on  the  actual  time  cost.  Should  he 
do  the  work  in  eighty  hours,  the  time  rate  would  be  $24. 
Twenty  per  cent  time  saved  on  $24,  the  time  cost,  would  be 
$4.80.  A  comparison  of  the  two  tables  will  show  the  wage 
scale  (wages  rate  30  cents  per  hour)  as  worked  out  by  the 
Halsey  and  the  Rowan  methods. 
16 


224    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 


COMPARISON   OF  DIFFERENT   METHODS   OF   CALCU- 
LATING  PREMIUMS.! 

Halsey's  Method. 


Hours 
Allowed. 

Hours 
Taken. 

(Time  Wages 
on  Job. 

Premium 
Earned 
on  Job. 

Total  Labor 
Cost. 

Workman's 

Rate  per 

Hour. 

100 

100 

$30.00 

$0.00 

$30.00 

$0.30 

100 

90 

27.00 

1.00 

28.00 

.311 

100 

80 

24.00 

2.00 

26.00 

.325 

100 

70 

21.00 

3.00 

24.00 

.343 

100 

60 

18.00 

4.00 

22.00 

.366 

100 

50 

15.00 

5.00 

20.00 

.40 

100 

40 

12.00 

6.00 

18.00 

.45 

100 

30 

9.00 

7.00 

16.00 

.533 

100 

20 

6.00 

8.00 

14.00 

.70 

100 

10 

3.00 

9.00 

12.00 

1.20 

100 

1 

.30 

9.90 

10.20 

10.20 

Rowan's  Method. 


Hours 
Allowed. 

Hours 
Taken. 

Time  Wages 
on  Job. 

Premium 
Earned 
on  Job. 

Total  Labor 

Cost. 

Workman's 

Rate  per 

Hour. 

100 

100 

$30.00 

$0.00 

$30.00 

$0.30 

100 

90 

27.00 

2.70 

29.70 

.33 

100 

80 

24.00 

4.80 

28.80 

.36 

100 

70 

21.00 

6.30 

27.30 

.39 

100 

60 

18.00 

7.20 

25.20 

.42 

100 

50 

15.00 

7.50 

22.50 

.45 

100 

40 

12.00 

7.20 

19.20 

.48 

100 

30 

9.00 

6.30 

15.30 

.51 

100 

20 

6.00 

4.80 

10.80 

.54 

100 

10 

3.00 

2.70 

5.70 

.57 

100 

1 

.30 

.297 

.597 

.597 

The  reader  will  observe  that  while  the  Rowan  plan  com- 
pared with  the  Halsey  method  does  prevent  excessive  earn- 
ings on  the  part  of  the  employee  when  he  multiplies  his 
output  many  times,  it  on  the  other  hand  gives  a  decidedly 

1  "Trade  Unionism  and  Labor  Problems,"  by  John  R.  Com- 
mons, p.  287. 


THE  PAYMENT  OF  THE  WORKMAN      225 

greater  reward  to  the  workman  until  he  more  than  doubles 
his  productive  capacity.  Is  this  a  desirable  characteristic 
of  a  wage  system?  Does  not  the  Kowan  Premium  tend  to 
encourage  the  workmen  to  remain  at  a  lower  level  of  effici- 
ency than  the  Halsey  Premium?  To  be  perfectly  fair  to  Mr. 
Rowan,  it  should  be  stated  that  his  rate  is  adjusted  for  the 
purpose  of  making  special  cuts  unnecessary.  If  a  man  loiters 
about  his  work  when  the  rate  is  being  set,  he  cannot  reap  too 
great  a  harvest  by  "rushing."  The  scheme  certainly  does 
act  automatically  in  reducing  output  cost,  but  it  seems  highly 
probable  to  the  writer  that  men  who  work  under  it  would  be 
somewhat  inclined  to  "nurse"  their  jobs  when  they  found 
that  their  added  exertions  increased  their  wages  so  slightly 
as  the  system  does  in  the  later  stages. 

In  1895,  Mr.  Fred  W.  Taylor  read  a  paper  before  the 
American  Society  of  Mechanical  Engineers,  in  which  he 
recognized  the  advantages  of  the  Halsey  system  and  its  su-  * 
periority  over  any  previously  proposed  scheme,  but  pointed 
out  that  it  has  one  very  grave  defect — while  it  encourages  the 
workman  to  do  good  work,  it  gives  only  a  passive  incentive 
by  not  punishing  him  for  not  doing  his  best.  In  other 
words,  the  Halsey  system  permits  men  to  gather  premium 
for  work  done,  but  it  does  not  necessarily  stimulate  a  man 
to  produce  his  utmost.  In  order  to  introduce  this  element, 
Mr.  Taylor  proposed  a  scheme  of  wage  payment  which  both 
punishes  and  rewards,  and  which  he  calls  the  differential 
piece-rate  system.  According-  to  this  plan,  a  man  is  rewarded 
only  after  he  attains  a  certain  fixed  standard  of  work.  If  he 
does  not  accomplish  the  job  in  a  given  time,  instead  of  being 
paid  an  ordinary  piece-rate  price,  he  is  paid  a  piece-rate 
price  considerably  lower  than  the  one  paid  if  he  does  the 
work  within  the  stipulated  period. 

If  the  usual  output  of  a  30-cent-an-hour  man  in  an  ordi- 
nary shop  is  one  piece  in  an  hour,  Mr.  Taylor  would  by  his 
timing  process  find  that  an  individual  working  at  his  maxi- 


226    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

mum  rate  on  every  part  of  the  job  could  accomplish  three 
pieces  in  an  hour.  He  would  then  fix  his  rate  as  follows: 
Three  pieces  in  an  hour  would  be  made  the  standard.  If  a 
man  could  perform  three  pieces  an  hour  he  would  get,  not  as 
he  would  get  in  the  day-rate  shop,  thirty  cents  an  hour,  or 
ten  cents  a  piece,  but  fifteen  cents  a  piece,  or  some  similar 
amount,  for  each  piece  performed,  so  that  his  hourly  rate,  if 


ISO 


135 


IZO 


Li 

*>    60 


» 

/ 

J>\ 

'jI 

4/ 

.^. 

f 

/ 

-* 

.^' 

c< 

>^T 

pff 

?  pi 

&<=E 

• 

^ 

y 

MX 


or 
6o  a. 


Fig.  26.— Taylor  Differential  Piece-Rate  System. 

he  reached  three  pieces  in  an  hour,  would  be  forty-five  cents. 
If  he  performed  more  than  three  pieces  in  an  hour,  say  four 
or  five,  he  would  still  get  15  cents  a  piece  for  every  one  per- 
formed, so  that  the  workman,  as  shown  by  Fig.  26,  would 
raise  his  wages  by  a  fixed  amount  for  every  piece  finished. 
If,  however,  he  could  not  make  three  pieces  within  the  allot- 
ted time,  he  would  not  get  15  cents  a  piece,  or  even  10  cents 
a  piece.     He  may  be  given  but  8  cents  for  every  piece  made 


THE  PAYMENT  OF  THE  WORKMAN      227 

below  three  pieces.  With  such  a  scheme  one  can  easily  see 
that  it  is  very  important  indeed,  from  the  workman's  point 
of  view,  to  perform  a  large  amount  of  work  in  a  day. 

This  plan  of  reward  differs  from  any  of  the  others  in 
another  essential,  aside  from  the  differential  piece-rate  idea, 
viz. :  The  time  allowed  to  do  the  job  is  very  accurately  deter- 
mined. The  superintendents  of  the  works  make  a  careful 
study  of  the  exact  time  it  needs  to  take  to  do  the  jobs,  work- 
ing in  the  quickest  kno^\Ti  way,  and  the  workmen  are  allowed 
a  period  just  sufficient  to  permit  them  to  perform  the  task  in 
the  most  approved  fashion  in  which  it  can  be  done.  Thus 
there  are  two  ideas  involved  in  Mr.  Taylor's  differential 
piece-rate  system:  (1)  a  punishment  for  one  who  does  not 
perform  the  task,  and  a  reward  for  the  one  who  does,  which 
is  the  method  of  pa}Tiient  idea;  and  (2)  the  workman  has 
accurately  determined  for  him  by  his  superiors  the  time  it 
should  take  to  do  the  work.  In  a  sul^sequent  paper  entitled 
"Shop  Management,"^  Mr.  Taylor  discusses  in  detail  his 
method  of  ascertaining  the  time  it  should  take  a  workman 
to  perform  his  task.  Every  job  is  divided  into  its  elemen- 
tary operations;  and  an  attendant,  by  means  of  a  stopwatch, 
observes  the  time  in  minutes  and  seconds  it  takes  a  good 
workman  to  perform  each  part.  The  total  time  of  the  job  is 
then  fixed  by  adding  together  the  time  it  takes  to  accomplish 
all  of  these  elementary  steps.  With  the  time  thus  deter- 
mined, a  task  is  given  which  will  keep  a  good  man  busy  in 
performing,  and  yet  which  is  within  his  possibilities.  Mr. 
Taylor  emphasizes  the  idea  that  the  task  must  be  so  hard 
that  only  a  first-class  man  can  perform  it.  He  gives  high 
wages  and  secures  a  low  labor  cost  by  accurately  determining 
the  maximum  possible  output  of  a  workman,  and  compelling 
him  to  reach  that  standard.     He  utilizes  the  hitherto  unre- 


^  Transactions  American  Society  of  Mechanical  Engineers^  Vol. 
XXIV,  pp.  1337-1480. 


228    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 
I 

alized  possibilities  of  the  laborer  by  learning  what  those  pos- 
sibilities are,  and  giving  the  reward  only  if  they  are  attained. 

The  Halsey  system,  as  criticised  by  Mr.  Taylor,  is  defec- 
tive, because  it  does  not  give  the  workman  a  definite  goal  to 
reach,  hence  the  high  wage  paid  does  not  reduce  the  output 
cost  as  it  should. 

In  the  American  Engineer  and  Railroad  Journal  for 
February  and  December,  1906,  there  appeared  two  articles 


tso 


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A^5 


Fig.  27. 


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m' 


pvec« 


^ 


.<**** 


g^l^ 


M/a4C    cost    p'\r  pi 

>Toff  owHH  >—»»  grg  seT 


«T    +hree  piec?s  i»er    rtr. 


/J^ 


^ 


y 


^ 


J.       ,t      3     -^       5       *       "^      8       9      »0 

—  PIECES       PER      HOUR  ^ 

-Emerson  Differential  Piece-Rate  System. 


descriptive  of  the  Santa  Fe's  shop-management  scheme.  The 
first  article  is  entitled,  ' '  Shop  Betterment  and  the  Industrial 
Method  of  Profit  Sharing, ' '  by  Harrington  Emerson.  The 
second  article  is  entitled,  "Betterment  Work  on  the  Santa 
Fe, "  wT-itten  by  the  staff  writers  of  the  Journal.  These  two 
articles  have  been  the  source  of  much  comment,  and  of  arti- 
cles in  other  magazines.     Mr.  Emerson  has  devised  a  piece- 


THE  PAYMENT  OF  THE  WORKMAN      229 

rate  system,  which  in  many  respects  is  analogous  to  the  Tay- 
lor plan.  He  determines  from  previous  shop  records,  and 
by  a  careful  study  of  the  best  possible  ways  of  performing 
the  work,  how  long  it  should  take  to  do  each  task  as  it  comes 
into  the  shop.  His  scheme  of  remuneration  is,  however, 
different  from  Mr.  Taylor's  as  regards  the  basis  of  payment. 
After  determming  the  minimum  time  it  takes  to  perform  a 
task,  a  man  is  paid  a  fixed  daily  rate  of  say  80  cents  an  hour 
until  he  perfonus  t^v'o  thirds  of  the  standard  task.  If  he 
performs  the  standard  task,  or  100  per  cent,  which  in  our 
illustration  would  be  three  pieces  in  the  hour,  he  is  given  an 
extra  reward  of  one  fifth  of  the  regular  wages  for  the  opera- 
tion. If  he  performs  more  than  two  thirds  of  the  work,  but 
less  than  the  standard,  he  is  likewise  paid  a  gradually  in- 
creasing bonus,  as  sho^mi  by  curv^e  A  A  on  Fig.  27.  If  the 
workman  can  perform  more  than  three  pieces  in  an  hour,  he 
is  paid  the  high  price  per  piece  for  every  piece  he  makes 
over  the  standard.  The  Emerson  system  differs  from  that  of 
Mr.  Taylor  in  one  respect.  It  is  not  a  piece-rate  system  un- 
til the  man  performs  at  least  two  thirds  of  the  standard  task. 
Between  the  Halsey  system  and  the  differential  piece-rate 
system,  as  developed  by  Messrs.  Taylor  and  Emerson,  there 
is  another  plan  proposed  by  Mr.  H.  L.  Gantt,  called  the 
"Bonus  System  for  Rewarding  Labor.  "^  Mr.  Gantt 's  scheme 
differs  from  the  differential  system  in  that  it  is  not  a  piece- 
rate  system,  yet  it  is  like  the  Taylor  system,  in  that  it  does 
set  a  definite  task  for  the  person  to  perform.  If  the  individ- 
ual performs  the  task  within  the  given  time,  he  is  paid  his 
regular  hourly  rate  and  a  certain  stipulated  bonus.  E very- 
job  is  allotted  a  certain  amount  of  time;  if  the  man  performs 
the  task  within  this  time,  he  is  given  the  bonus,  and  as  soon 
as  he  finishes  one  job  he  is  given  another,  to  which  he  is  like- 


^  Transactions  American  Society  of  Mech(:i,nicQ,l  En^ineers^  Vol. 
XXIII.  1902,  p.  341, 


230    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

wise  allotted  a  definite  amount  of  time.  The  result  is  that  if 
a  man  in  the  course  of  a  day  doubles  his  output,  he  will  get 
a  day's  wage  plus  the  bonuses,  which  are  attached  to  the 
separate  jobs  he  has  performed.  If  he  fails  to  do  the  work 
within  the  allotted  time,  he  gets  only  his  day's  wage. 

As  a  matter  of  fact,  it  makes  very  little  difference  which 
system  of  wage  pajmient  is  used.  There  is  no  reason  why 
the  Halsey  system  need  be  a  "drifting"  system,  as  termed 
by  Taylor.  The  thing  that  makes  the  differential  piece-rate 
system  effective  is  that  the  manager  of  the  shop  determines 
the  time  that  should  be  taken  to  do  the  work,  and  fixes  his 
differential  rate  accordingly.  Should  the  manager  of  the 
plant,  where  the  premium  system  is  applied,  take  the  same 
means  to  determine  the  minimum  working  time,  the  premium 
system  could  be  adjusted  equally  well.  There  are  shops  which 
have  tried  both  the  premium  and  the  differential  piece-rate 
systems;  and,  after  giving  both  a  fair  trial  extending  over 
many  months,  found  the  premium  plan  considerably  more 
satisfactory.  On  the  other  hand,  there  are  shops  which  have 
ultimately  decided  upon  the  differential  piece-rate  system. 
Indeed,  the  method  of  pajmient  is  not  so  important,  if  the 
concern  can  find  a  scheme  that  will  justly  determine  the 
possibilities  of  a  worker.  The  system  of  wage  payment  for 
this  purpose  is  a  secondar}'-  matter.  The  method  of  obtain- 
ing the  possible  speed  at  which  a  worker  can  produce  is  the 
real  problem  of  management,  and  the  real  object  of  all  wage- 
pa}mient  systems  should  be  to  reward  him  in  such  a  manner 
that  he  will  produce  this  maximum. 

Mr.  Taylor  suggests  his  unit-time  study  method  to  obtain 
the  speed  possibilities  of  the  man;  Mr.  Halsey  gets  his  data 
by  studying  shop  records  and  carefully  observing  the  men. 
Both  schemes  have  produced  good  results  under  different  con- 
ditions. Generally  speaking,  the  unit-time  study  system  is 
successful  in  shops  which  handle  contracts  of  a  more  or  less 
unvarying  character^  and  are  not  compelled  to  follow  exact- 


THE  PAYMENT  OF  THE  WORKMAN      231 

ing  requirements.  In  one  shop  of  a  miscellaneous  t}^e  which 
handled  work  that  had  to  be  exceedingly  accurate,  the  unit- 
time  study  system^  after  a  fair  trial  extending  over  many 
months,  proved  a  most  dismal  failure.  When  men  tried  to 
make  the  calculated  time,  they  spoiled  the  work.  In  another 
shop  it  has  proven  successful,  yet  the  same  man  who  made 
it  a  success  in  the  one  shop,  failed  to  make  it  a  success  in 
the  other,  and  he  had  the  cooperation  of  the  management  in 
both  cases.  The  cause  of  the  failure  in  the  one  shop  was  the 
exacting  type  of  the  work,  and  in  the  other  the  success  was 
due  to  the  rather  crude  character  of  the  output. 

In  the  shop  where  the  differential  system  failed  the  pre- 
mium system  was  next  tried,  the  time  being  predetermined 
by  previous  shop  records,  and  by  keeping  after  the  men;  and 
the  scheme  was  successful,  the  very  scheme  which  Mr.  Tay- 
lor so  severely  condemns. 

In  his  paper,  Mr.  Taylor  emphasizes  one  thing  which 
should  not  be  passed  over  without  some  comment.  He  does 
not  advocate  the  paying  of  high  wages  so  much  as  he  urges 
the  paying  of  wages  which  are  considered  high  by  the  aver- 
age workman  of  the  grade  he  employs.  His  plan  is  to  teach 
a  low-grade  man  to  do  work  which  would  othen\'ise  be  given 
to  a  highly  skilled  man.  "The  writer"  (Mr.  Taylor)  "goes 
so  far  as  to  say  that  almost  any  job  that  is  repeated  over  and 
over  again,  however  great  skill  and  dexterity  it  may  require, 
providing  there  is  enough  of  it  to  occupy  a  man  throughout 
a  considerable  part  of  the  year,  should  be  done  by  a  trained 
laborer  and  not  by  a  mechanic.  A  man  with  only  the  intel- 
ligence of  an  average  laborer  can  be  taught  to  do  the  most 
difficult  and  delicate  work  if  it  is  repeated  often  enough, 
and  his  lower  mental  caliber  renders  him  more  fit  than  the 
mechanic  to  stand  the  monotony  of  repetition."^ 

1  Transactions  American  Society  of  Mechanical  Engineers,  VoL 
XXIV,  p.  1347. 


232    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

Care  must  be  taken  not  to  cslttcj  that  policy  too  far. 
There  are  concerns  in  this  country  employing  this  means  to 
have  their  work  performed.  One  plant  has  advertisements 
in  papers  every  once  in  a  while  for  men.  They  employ  a 
high-salaried  man,  who  is  nominally  in  charge  of  a  large  de- 
partment, but  whose  work  is  delegated  to  an  assistant.  The 
chief  of  this  department  spends  so  much  time  getting  people 
that  he  is  not  in  touch  with  the  work  as  he  should  be.  He 
gets  men  at  a  low  price,  and  just  about  the  time  they  are 
trained  they  leave.  The  plant  is  in  a  state  of  unrest  and 
irritation  at  all  times,  due  to  the  fact  that  about  one  third 
of  the  working  force  is  always  just  learning,  and  is  making 
mistakes  that  cause  the  gang  bosses  and  foremen  to  be 
blamed  for  not  looking  after  the  men.  These,  in  turn,  vent 
their  spleen  on  the  man  who  ignorantly  makes  mistakes. 
This  concern,  however,  looks  with  pride  upon  its  average 
wage  rate  per  man,  and  fully  believes  that  it  is  carrj^ing  out 
a  sound  labor  policy.  On  the  contrary,  the  low  average  per 
man  being  paid  for  work  regarded  elsewhere  as  safe  only  in 
the  hands  of  skilled  men  is  costing  the  firm  dearly  in  spoiled 
work. 

In  order  to  determine  the  best  way  to  carry  on  a  plant, 
one  should  not  be  guided  by  any  set  of  opinions  or  by  any 
one  system.  The  manager  should  know  the  men's  records, 
the  amount  of  material  that  is  used  and  wasted,  the  amount 
of  defective  products  returned  by  purchasers,  and  the  per- 
formances of  the  machinery.  These  are  the  things  which  his 
shop  accounting  system  should  tell,  as  the  following  chapters 
will  explain. 


CHAPTER  XVI 
RECORD    OF   THE   WORKERS 

If  the  management  establishes  a  fair  wage  scale,  it  can 
enforce  the  performance  of  good  work  by  discharging  incom- 
petent workers,  because  well-paid  men  want  to  do  good  work 
in  order  to  hold  their  jobs.  If  the  wage  scale  is  unfairly  low 
the  workmen  will  be  able  to  find  better,  or  at  least  as  good, 
employment  elsewhere,  so  that  discharge  is  no  threat  to  com- 
pel good  work  under  these  conditions.  Assuming  a  fair 
wage  scale,  how  can  the  management  enforce  the  performance 
of  accurate  work?  Obviously,  there  is  but  one  way,  and 
that  is  to  punish  the  workmen  who  turn  out  poor  work. 
Good  management  dictates  more  than  a  policy  of  finding  out 
what  each  man  does.  To  have  good  work  turned  out  as  a 
matter  of  course,  is  the  goal  for  which  all  concerns  should 
strive,  and  this  can  be  done  only  by  getting  rid  of  the  poor 
men  and  by  seeing  that  no  incompetent  men  are  re-employed. 
To  keep  good  men,  rewards  must  be  given  either  by  promo- 
tion or  advances  in  wages  from  time  to  time.  To  reward  the 
right  employees,  there  must  be  an  accurate  record  kept  of  the 
men  from  the  time  they  enter  the  plant  until  they  leave  it. 

For  a  small  shop,  a  foreman  can  be  secured  who  may  be 
entrusted  with  determining  the  efficiency  of  the  employees, 
because  if  he  is  in  the  habit  of  being  easily  deceived  by  in- 
competent assistants,  the  defect  soon  manifests  itself  to  the 
management.  In  large  plants,  however,  good  foremen  are 
frequently  embarrassed  by  poor  workmen;  and,  many  times, 
poor  workmen,  after  being  discharged  from  one  department, 
find  employment  in  other  departments  until  their  delinquen. 

233 


234    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

cies  are  again  discovered.  If  insufficient  record  is  kept  of 
their  service  in  the  plant,  they  may,  after  a  time,  be  re-em- 
ployed in  the  department  in  which  they  first  demonstrated 
their  inefficiency,  and  even  under  the  original  foreman. 

No  ordinary  person,  having  under  his  constant  guidance 
three  hundred  to  four  hundred  men,  can  keep  in  mind  all 
past  employees.  It  is  not  hard  to  discharge  a  man  if  he  dis- 
plays inefficiency,  but  by  the  time  he  has  proven  his  inca- 
pacity, the  firm  loses  money,  and  the  man  himself  is  being 
done  an  unkindness  by  being  given  even  passive  encourage- 
ment to  work  in  a  field  for  which  he  is  unfitted.  It  is  better 
for  him  to  be  compelled  to  discover  a  place  where  he  will 
be  sei-viceable,  or  to  find  an  occupation  more  suited  to  his 
ability. 

Some  few  years  ago,  there  was  a  plant  which  did  not  believe 
in  keeping  records  of  its  employees.  The  foreman  hired 
men  whenever  he  needed  help.  In  one  instance,  an  em- 
ployee was  caught  idling  and  was  discharged.  He  lost  half 
a  day,  was  re-employed  in  another  department  the  next  morn- 
ing, and  at  the  end  of  the  week,  in  spite  of  the  lost  time,  he 
received  more  money  for  the  same  work  than  he  would  have 
had  with  his  old  job  under  the  other  foreman.  The  second 
time  he  "soldiered"  as  much  if  not  more  than  the  time 
before,  but  was  circumspect  enough  to  be  employed  very 
assiduously  whenever  the  officials  approached  his  vicinity. 

Another  organization  transferred  men  from  one  depart- 
ment to  another  without  ever  recording  such  changes  in  the 
main  office.  A  vacancy  once  occurred  in  a  department  where- 
in a  man  desired  to  be  located,  and  he  asked  permission  to 
change.  The  boss  signified  his  consent  by  saying,  "All 
right,  I'U  send  your  time  to  the  main  office. "  A  week  later 
the  pay  envelope  showed  that  the  man  was  paid  for  working 
in  two  departments  at  the  same  time.  To  cap  the  climax, 
when  he  reported  the  overpay,  he  was  reprimanded  by  his 
former  boss,  who  said,  ' '  You  might  have  kept  quiet  and  not 


RECORD   OF  THE  WORKERS  235 

have  gotten  me  into  trouble.  It  didn't  do  you  any  good  to 
squeal."  And  it  surely  did  not,  for  the  man  was  now  com- 
pelled to  wait  two  weeks  for  his  next  week's  wage,  the  pay- 
master remarking  that  it  took  so  much  time  to  make  the 
correction. 

In  order  to  make  the  foreman  responsible  for  good  work, 
both  in  quality  and  in  quantity,  the  manager  should  take 
pains  to  supply  him  with  eflicient  men,  and  to  do  this  he 
should  have  a  working  scheme  that  will  keep  proper  record 
of  the  employees.  In  a  large  concern,  this  can  be  done  to 
best  advantage  by  establishing  a  labor  bureau.  A  small  con- 
cern can  safely  let  the  time  department  keep  a  card- index 
record  of  the  men. 

The  problem  of  the  labor-employing  bureau  may  be 
divided  into  several  parts: 

1.  To  select  and  employ  the  proper  laborers  for  different 
duties. 

2.  To  keep  record  of  the  employees  who  are  still  em- 
ployed, with  their  status  as  workers. 

3.  To  keep  record  of  all  people  who  have  been  employed 
at  any  time  with  reasons  for  their  dismissal  and  their  record 
as  employees. 

The  best  basis  for  good  judgment  is  accurate  knowledge. 
If  an  employer  secures  accurate  knowledge  of  an  applicant 
for  a  place  before  he  hires  him,  he  can  save  himself  much 
trouble  and  some  expense.  There  are  several  things  a  manu- 
facturer should  know  at  once  about  an  employee. 

1.  Has  he  any  constitutional  weaknesses  or  injuries? 

2.  His  approximate  age. 

3.  His  educational  qualifications. 

4.  His  experience. 

The  first  three  can  be  gotten  pretty  accurately  by  combin- 
ing answers  on  the  part  of  the  applicant  with  personal  obser- 
vation. The  fourth  one  is  not  so  easily  determined  by  asking 
questions,  especially  if  the  applicant  is  inclined  to  be  un- 


236    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

truthful.  Many  men  apply  for  jobs  for  which  they  are  unfit- 
ted or  have  had  a  very  meager  preparation.  In  one  shop  an 
ex-weaver  secured  a  position  as  a  steamfitter  by  merely 
stating  to  the  hiring  clerk  a  lot  of  hypothetical  experience. 
As  a  matter  of  fact  the  young  man  did  not  know  the  differ- 
ence between  a  pipe-wrench  and  a  pipe-cutter,  but  he  held 
the  job  for  six  months  before  he  made  too  many  blunders. 

The  safest  way  to  determine  a  man's  experience  is  to 
have  him  state  the  names  of  his  former  employers  and  people 
to  whom  one  can  be  referred  who  can  tell  about  his  efficiency 
and  conduct  from  actual  experimental  knowledge. 

Considerable  thought  should  be  put  upon  the  framing  of 
the  questions  on  the  application  blank.  For  instance,  in 
asking  for  the  practical  experience  the  applicant  should  be 
requested  to  state  the  trade  or  occupation  learned,  the  length 
of  time  in  service,  and  what  was  done  while  in  service.  In 
this  way  the  applicant  will  give  definite  information  con- 
cerning his  work  and  will  not  have  a  chance  to  branch  off 
into  meaningless  generalities.  Every  question  should  be  so 
framed  that  the  answer  to  it  must  be  brief  and  give  definite 
information  about  one  thing. 

Some  firms  require  the  ajDplicant  to  state  age,  whether 
married  or  single,  whether  he'uses  drugs,  liquor,  or  tobacco, 
whether  he  belongs  to  a  union  or  not,  whether  he  is  a  citizen 
of  the  country,  if  he  knows  anyone  in  the  plant,  why  he  left 
his  former  place,  the  number  of  people  depending  on  his 
wages,  whether  he  speaks  English"  and  can  read  and  write, 
what  wages  he  expects,  what  he  previously  earned,  does  he 
look  for  further  advancement,  why  he  wants  to  be  employed 
by  that  particular  plant,  and  sometimes  even  other  questions. 
One  large  concern  asks  no  less  than  forty  questions  of  every 
prospective  employee.  When  one  goes  to  that  extent  he  is 
getting  data  which  even  if  truthfully  given  would  be  unnec- 
essary for  any  but  the  most  unusual  conditions.  The  data, 
however,  caftuot  be  depended  upon  after  it  is  obtained- 


RECORD  OF  THE  WORKERS         287 

Men,  especially  those  in  middle  life,  are  very  apt  to  misstate 
their  ages.  Several  years  ago  a  large  concern  determined  to 
find  out  the  ages  of  all  of  its  employees,  both  those  who  had 
been  long  in  service  and  those  who  were  just  being  engaged. 
In  hardly  any  case  did  the  men  state  their  exact  age.  The 
younger  men  overstated  their  age  from  one  to  five  years,  and 
the  older  men  understated  their  age  five  years  and  more.  In 
one  case  a  man  of  more  than  sixty  years  told  the  clerk,  ' '  I 
am  forty-three,  and  if  you  come  around  thirty  years  from 
now  I'll  still  be  forty-three." 

Men  resent  questions  of  an  inquisitorial  nature.  They 
rarely  object  to  stating  whether  married  or  single;  but  when 
asked  why  they  want  to  be  employed  in  the  plant  or  whether 
they  expect  any  advances  in  wages,  they  feel  they  are  being 
asked  what  a  workman  once  called  ' '  fool  questions  an3rway. ' ' 

Much  more  information  can  be  obtained  about  the  man 
by  looking  up  references.  Some  firms  make  it  a  point  to 
send  out  blank  forms  to  previous  employers  of  an  applicant 
whom  they  contemplate  hiring.  Others  look  up  the  refer- 
ences of  every  man  who  applies,  so  that  they  will  have  a 
trustworthy  list  of  available  candidates.  The  letter  seeking 
information  about  the  employee  should  be  framed  in  such  a 
way  that  the  former  employer  can  answer  very  briefly  and 
definitely  questions  which  will  give  one  a  very  good  idea  of 
the  capabilities  and  personality  of  a  man.  One  form  of  a 
letter  of  this  character  is  shown  below. 

Dear  Sir: 

has  applied  for  a  place  as 

and  has  given  your  name  as  reference.     Will  you  kindly  answer 

the  following-  questions  regarding ,  and  if  there  is 

any  other  information  relating  to  him  which  is  of  interest,  we 
shall  be  indebted  to  you  for  it. 

1.  How  long  was  the  above  man  employed  by  you? 

2.  In  what  capacity? 

3.  What  was  his  rate  per  hour? 

4.  What  advances  did  he  get,  if  any? 


238    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

5.  Is  he  a  good  mechanic? 

6.  Are  his  habits  good? 

7.  Is  he  regnlar  in  attendance  and  industrious? 

8.  Why  did  he  leave? ." 

Any  information  you  give  us  will  be  treated  as  strictly  confi- 
dential, and  we  shall  be  glad  to  answer  requests  of  a  similar  nature 
regarding  men  who  give  our  name  as  reference. 

Very  truly  yours, 


This  letter  embodies  questions  which  can  be  accurately 
answered  with  little  trouble  on  the  part  of  the  individual 
who  receives  it.  Some  officials  object  to  telling  the  public 
or  business  rivals  what  wages  they  pay  their  workmen.  If 
experience  shows  that  firms  are  unwilling  to  state  the  wages 
they  have  paid  to  past  employees  it  is  well  to  omit  the  ques- 
tion, and  in  fact  all  questions  which  they  believe  another 
company  would  not  care  to  answer.  The  reason  for  leaving 
out  such  questions  is  that  if  there  are  too  many  objection- 
able requests  there  is  a  strong  probability  of  the  letter  being 
ignored. 

After  one  has  obtained  full  information  concerning  the 
man,  the  next  step  is  to  keep  a  record  of  him  as  a  worker. 
No  recording  scheme  is  of  value  unless  it  records  actions  as 
well  as  opinions.  By  this  is  meant  that  one  of  the  most  un- 
safe bases  for  judgment  of  a  man's  ability  is  what  some 
individual  thinks  of  him,  unless  the  estimate  is  supported 
by  evidence  which  shows  the  basis  for  the  opinion. 

The  scheme  which  keeps  record  of  the  employees  should 
do  two  things.  In  the  first  place,  it  should  keep  accurate 
record  of  what  each  person  is  doing  so  as  to  enable  the  fore- 
man and  other  officials  to  place  the  men  to  the  best  advan- 
tage in  the  plant,  and  in  the  second  place  it  should  make 
it  impossible  for  men  to  be  put  on  the  pay-roll  who  are  not 
doing  the  work  they  are  expected  to  do,  or  who  may  not  be 
in  existence  at  all.  / 


RECORD  OP  THE  WORKERS 

A  good  employee  must  at  least: 

1.  Be  regular  in  his  attendance,  prompt  in  his  appear- 
ance at  starting,  and  faithful  in  his  stay  in  the  plant. 

2.  He  must  be  diligent  while  within  the  plant. 

3.  He  must  be  efficient. 

It  was  shown  in  the  previous  chapter  how  the  plan  of  wage 
payment  develops  the  diligence  and  efficiency  of  the  em- 
ployee, but  no  matter  what  the  wage  scheme  is,  unless  it  has 
back  of  it  some  recording  device  to  keep  track  of  what  a  per- 
son is  doing,  it  is  impossible  to  gather  data  for  the  establish- 
ment of  a  good  wage  system,  or  to  determine  the  cost  of  the 
article;  and  it  is  likewise  impossible  for  the  management  to 
ascertain  who  are  the  good  and  who  are  the  poor  employees. 
A  man  is  a  good  man  for  the  firm  if  his  average  record  is 
good,  and  a  poor  man  for  the  firm  if  his  average  record  is 
poor.  The  basis  for  determining  his  standing  should  be, 
"What  has  he  done?" 

Foremen  are  very  apt  to  make  wrong  estimates  of  men, 
because  they  do  not  know  their  averages  of  efficiency.  For 
example,  in  one  place  there  is  a  bright,  capable  man  who 
has  on  numerous  occasions,  in  face  of  considerable  difficulty, 
erected  engines.  His  work  has  always  been  done  with  few 
men,  and  these  not  of  the  best,  yet  he  has  not  made  a 
serious  mistake  in  the  erecting  of  several  engines.  There  is 
another  man  who  on  two  separate  occasions  was  likewise 
given  some  engines  to  erect.  On  these  two  occasions  it  hap- 
pened, through  laxity  on  the  part  of  the  shop  management, 
that  he  was  able  to  borrow  men  from  other  gang  bosses,  and 
the  engines  he  had  to  erect  were  of  such  a  nature  that  he 
could  use  nearly  all  the  temporary  bolts  and  other  material 
which  the  other  gang  boss  had  been  compelled  to  collect  in 
order  to  erect  some  previous  machines.  The  first  man's  in- 
genuity in  gathering  material  enabled  the  second  man  to  take 
advantage  of  these  conditions,  and  in  addition  he  used  some 
\aborers  who  were  not  properly  charged  to  the  job.     In  the 


240  THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

course  of  the  erection  he  made  a  great  many  mistakes,  had 
holes  drilled  in  the  wrong  places,  which  made  it  necessary 
to  have  them  tapped  out  and  filled  with  plugs,  he  did  nearly 
twice  as  much  actual  work  in  getting  the  cylinders  and  hous- 
ings in  the  proper  place,  and  his  work  all  through  was  de- 
cidedly that  of  an  amateur.  Nevertheless  his  engines  were 
done  in  a  week's  less  time  than  were  the  other  man's.  He 
had  established  for  himself  a  record  in  the  plant,  and  when 
there  was  an  opening  for  advancement  he  was  given  prece- 
dence over  his  rival.  Workmen  in  the  humbler  positions 
are  sometimes  compelled  to  submit  to  such  conditions.  The 
foremen  do  not  mean  to  be  unjust.  They  cannot  be  alto- 
gether blamed  for  advancing  the  wrong  man,  when  that  per- 
son makes  a  spectacular  showing.  In  the  case  above  cited, 
if  there  had  been  exact  time  records  kept  of  all  the  time  ex- 
pended on  each  engine,  there  would  have  been  a  considerable 
showing  in  favor  of  the  first  man  who  did  not  get  the  reward. 

There  is  nothing  so  fatal  to  the  discipline  of  a  plant  nor 
so  disastrous  to  its  smooth  and  profitable  working  as  to  have 
a  body  of  men  irregular  in  their  appearance,  who  come  late 
and  go  out  at  odd  times. 

Efficiency  is,  to  a  great  extent,  a  matter  of  faithfulness; 
and,  if  a  firm  insists  upon  regular  and  prompt  appearance, 
it  is  paving  the  way  for  good  work.  There  is  only  one  way 
to  stop  irregularity — make  it  unjDrofitable.  If  a  firm  weeds 
out  the  non-dependable  individuals,  it  will,  before  long,  de- 
velop a  good  working  organization.  To  weed  out  these  un- 
desirables one  should  have  an  accurate  record  of  the  entering 
and  leaving  time  of  all  the  workers  in  the  concern. 

One  of  the  most  effective  devices  of  time  recording,  and 
the  one  first  adopted,  is  the  time  check.  This  is  used  in  a 
variety  of  forms. 

1.  The  in-board  out-board  form.  At  the  entrance  of  the 
works  are  placed  two  boards,  one  marked  "out-board," 
placed  near  the  gate,  and  the  other  marked   "in-board." 


RECORD   OF   THE  WORKERS  241 

placed  farther  toward  the  work  rooms.  Every  man  is  as- 
signed a  numbered  check,  which  hangs  with  the  correspond- 
ing number  on  one  or  the  other  board  according  as  he  is  in 
or  out  of  the  works.  While  the  men  are  filing  in,  taking 
their  checks  off  the  out-board  and  hanging  them  on  the  in- 
board, a  watchman  stands  near  by  to  see  that  no  one  takes 
other  than  his  own  check.  The  gate  is  closed  as  soon  as  the 
signal  for  starting  work  is  given,  so  that  no  one  can  get  to 
his  check  after  starting  time  without  calling  the  timekeeper's 
attention  to  the  fact. 

2.  A  modification  of  the  above  scheme  is  to  give  the  men 
actual  possession  of  th6  check,  which  they  drop  in  a  box  on 
entering  the  works.  Obtaining  the  time  record  by  either 
method  is  a  simple  matter.  After  the  plant  is  started,  all  the 
checks  are  in,  and  the  timekeeper  makes  a  record  of  the  num- 
bers. In  the  second  plan  he  takes  the  checks  into  the  work- 
rooms and  returns  them  to  the  men.  In  this  way  he  comes 
into  actual  contact  with  each  workman,  so  that  there  is  no 
possible  means  by  which  one  man  can  drop  another's  check 
into  the  box  without  being  detected. 

3.  The  third  plan  dispenses  with  the  check.  The  work- 
man is  given  a  number,  which  he  must  announce  as  he  en- 
ters a  specified  gate.  A  clerk  at  the  entrance  crosses  off  the 
number  as  the  employee  calls  it  out.  With  this  scheme,  it 
is  impossible  for  a  man  to  give  more  than  one  number,  and 
the  clerk  has  an  immediate  record  of  the  men  who  are  in  the 
plant. 

4.  While  these  schemes  are  effective  for  plants  of  mod- 
erate size,  or  where  the  work-rooms  are  close  to  the  entrance, 
they  fail  to  be  thoroughly  satisfactory  when  the  departments 
become  scattered  over  a  large  area.  Unless  there  be  some 
kind  of  a  check  on  the  men  after  they  enter  the  main  gate, 
those  disposed  to  shirk  will  take  advantage  of  the  opportu- 
nity to  waste  time  in  getting  to  their  places  after  they  have 
recorded  their  entrance,     To  prevent  these  losses  the  large 


242    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

firms  have  been  forced  to  adopt  some  plan  which  would  re- 
cord the  employee's  entrance  into  the  department  in  which 
he  is  due.  A  check  plan  of  surmounting  the  difficulty  is  to 
have  a  clerk  distribute  the  checks  at  some  main  entrance, 
and  then  require  each  man  to  hang  his  check  upon  a  board 
within  the  department  in  which  he  is  working.  This  scheme 
proves  effective  in  insuring  the  prompt  appearance  of  the 
men  in  their  departments,  but  it  involves  more  clerical  work 
than  is  necessary,  because  it  requires  a  set  of  clerks  at  the 
entrance  gates  as  well  as  another  set  who  make  record  of  the 
checks  as  they  are  hung  in  the  departments.  In  order  to 
reduce  clerical  work  to  a  minimum  and  at  the  same  time 
record  the  time  accurately,  mechanical  devices  have  been 
perfected. 

5.  The  recording  clock.  The  greatest  improvement  that 
has  been  made  in  timekeej)ing  devices  is  the  introduction  of 
the  recording  time-clock.  There  are  a  number  of  styles  and 
varieties  on  the  market,  but  all  aim  to : 

1.  Enable  the  employee  to  record  his  own  time  of  enter- 
ing and  leaving  the  plant,  thus  preventing  errors  on  the  part 
of  timekeepers. 

2.  Enable  the  timekeeper  to  compute  readily  the  number 
of  hours  each  employee  has  to  his  credit,  thus  saving  clerical 
work  in  making  up  the  pay-rolls. 

3.  Prevent  employees  from  entering  the  departments  after 
starting  time  and  leaving  before  quitting  time. 

These  clocks  are  often  used  in  connection  with  a  shop 
cost  system,  and  have  proven  very  satisfactoiy.    (See  Fig.  28. ) 

According  to  this  scheme  a  card  is  made  out  once  every 
week  or  two  weeks  for  each  man.  The  man  gets  a  num- 
bered card,  which  is  placed  in  the  rack  "out"  before  he 
enters  the  plant.  When  he  goes  to  his  department  he  inserts 
the  card  into  the  slot^,  depresses  the  knob  B,  which  records 
his  time  of  entering.  The  card  is  then  placed  on  the  "in" 
rack.    When  he  leaves  the  plant  he  takes  the  card  from  the 


RECORD   OF  THE   WORKERS 


243 


'4n"  rack,  goes  through  a  similar  process,  and  records  his 
leaving  time,  after  which  he  places  it  in  the  "out"  rack. 
This  card  at  the  end  of  the  week,  two  weeks,  or  half  month, 
records  the  total  number  of  hours  he  was  within  the  plant, 
and  all  latenesses  or  irregular  leaving  are  stamped  in  red 
ink,  thus  calling  attention  at  once  to  his  delinquencies.     At 


By  courtesy  of  Internationa^  Time  Recording  Co.,  Endicott,  N.  Y. 

Fig.  28.— Recording  Clock  with  Cost  Equipment.    Each  clock  can 
conveniently  keep  record  of  two  hundred  people. 

the  end  of  every  day,  the  timekeeper  enters  the  daily  hours 
in  the  total  column,  so  that  at  the  end  of  the  period  the 
cards  can  readily  be  made  up  and  each  man  given  his  wages 
from  the  record.  In  many  cases  the  back  of  the  card  is  used 
as  a  check,  so  that  the  payment  is  made  by  merely  having  the 
paymaster  and  foreman  sign  and  countersign  the  back  of  it. 
In  any  case,  the  cards  for  each  man  are  kept  and  filed  under 
his  name,  thus  giving  a  truthful  record  of  his  regularity  as  a 
worker,  truthful  because  it  shows  him  by  his  own  actions 
and  not  by  a  report  of  opinions. 


244    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

The  recording  clocks  help  in  making  out  the  pay-rolls, 
and  in  keeping  accurate  record  of  the  men  passing  in  and 
out  of  the  plant;  but  if  the  time  scheme  does  only  this,  the 
firm  has  a  very  poor  system.  Good  accounting  demands  that 
no  plan  is  complete  unless  it  can  be  verified  automatically 
from  independent  sources.  Moreover,  one  should  know  not 
only  that  a  man  has  been  present  during  a  certain  period, 
but  also  that  he  was  an  efficient  worker  while  he  was  present. 
His  efficiency  can  be  determined  by  knowing  what  he  has 
done  with  the  time  recorded  on  his  time  card. 

Several  schemes  may  be  cited  by  which  a  record  is  kept 
of  a  man's  actions  while  within  the  plant. 

1.  Send  a  timekeejDer  around  every  day  to  get  from  the 
workmen  the  time  they  expend  on  each  job  or  contract. 

2.  Have  the  man  list  on  a  card  his  tasks  from  the  begin- 
ning to  the  end  of  the  day. 

8.  Have  the  man  record  on  separate  slips  of  paper  for 
each  contract  the  hours  he  spent  on  each  particular  job. 

4.  Have  the  office  attach  to  each  job,  or  piece  of  material, 
a  tag  on  which  the  workman  records  his  name  or  number 
and  the  time  for  his  operation. 

5.  Have  a  multiple  part  tag  attached  by  the  office,  so 
made  that  as  each  operation  is  completed,  the  workman  tears 
off  a  portion  on  which  is  stated  his  operation,  number,  and 
time  elapsed. 

6.  Have  the  office  make  out  a  slip  for  each  operation  to 
be  performed  on  every  piece  of  work  for  every  contract.  In 
this  case  the  man  is  allotted  the  work,  and  the  time  is 
stamped  when  he  is  given  the  paper.  When  he  returns  it, 
it  is  again  stamped,  and  the  elapsed  hours  and  minutes  will 
show  his  time  on  the  job.  Another  slip  is  immediately  given 
him,  so  that  he  has  mapped  out  for  him  his  entire  work. 

In  the  first  scheme,  the  timekeeper  is  sent  around  to  enter 
in  a  book  the  time  each  man  spends  on  each  contract.  (See 
Fig.  29. )     The  time  allotted  to  each  contract  may  be  quite 


o 
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S46    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

inaccurate,  especially  if  the  shop  has  several  contracts  or 
different  classes  of  orders.  In  one  plant  where  this  scheme 
was  in  operation,  the  men  would  give  the  wildest  kind  of 
guesses  as  to  the  time  they  spent  on  each  Job.  Their  only 
care  was  to  see  that  the  amounts  they  apportioned  around 
equalled  the  total  time  they  spent  within  the  plant.  Coupled 
with  its  inaccuracy,  such  a  plan  entails  an  unnecessary 
amount  of  clerical  labor;  because  the  time  of  each  contract 
must  be  summarized  on  an  analysis  sheet  (see  Fig.  80)  be- 


/v    ff- 


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Time. 


fore  it  can  be  finally  allotted  to  the  individual  contracts. 
(See  Fig.  32. )  This  labor  has  been  reduced  to  a  very  great 
extent,  however,  by  having  the  time-book  ruled  in  columns 
for  each  contract,  and  by  inserting  in  their  respective  col- 
umns the  time  that  the  workmen  expended.  The  footings  of 
these  columns  equal  the  time  expended  on  the  different  con- 
tracts by  the  end  of  the  week.  However,  in  places  where  the 
shop  has  a  great  many  contracts  the  time-book  increases  to 
such  large  proportions,  and  the  ruling  becomes  so  elaborate 
that  the  columnar  books  become  cumbersome  and  expensive. 
The  second  scheme  of  having  the  men  list  their  tasks  on 
a  card  (see  Fig.  31)  was  introduced  for  the  purpose  of  mak- 
ing the  men  more  careful  in  apportioning  their  time,  the 
9<SBumption  being  that  if  they  could  record,  theii:  time  as  they 


RECORD  OF  THE  WORKERS 


247 


completed  each  job  they  would  find  it  just  as  easy  to  be  ac- 
curate as  to  be  inaccurate  in  distributing  their  labor  by  con- 
tracts. The  scheme  is  weak  in  that  it  is  almost  impossible 
to  make  men  record  their  hours  as  they  complete  their  tasks. 
In  about  eight  cases  out  of  ten  the  men  have  their  pencils 
and  cards  securely  locked  in  their  tool  boxes  during  the  time 
they  are  working.    Toward  the  end  of  the  day  they  make  out 


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their  time,  apportioning  the  hours  very  largely  according  to 
their  fancy.  The  result  of  this  scheme  is  that  it  is  no  more 
accurate  than  the  first,  nor  does  it  save  clerical  labor,  because 
the  cards  must  be  sorted  by  contracts  and  then  totaled  on 
separate  contract  sheets  (see  Fig.  82)  before  they  can  be  re- 
capitulated. In  one  respect,  the  card  system  does  save  time. 
It  dispenses  with  the  services  of  the  timekeeper,  who  goes 
around  quizzing  the  men. 

In  the  third  scheme,  the  man  makes  out  a  separate  slip  of 
paper  for  each  contract  on  which  he  works.  (See  Fig.  33.) 
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RECORD   OF  THE  WORKERS  249 

contracts.  The  men,  as  a  rule,  do  not  make  any  more  effort 
to  be  exact  in  their  statements  because  of  these  contract 
slips.  The  pads  of  slips,  like  the  cards,  are  either  locked  in 
the  tool  boxes  or  are  in  the  hands  of  gang  bosses,  who  give 
them  to  the  men  at  the  end  of  the  day.  The  separate  slip 
system,  however,  has  the  advantage  of  saving  the  clerks  the 
trouble  of  resorting  the  papers  to  charge  properly  the  time 
to  the  contracts.     With  this  scheme,  the  total  time  for  each 


MACHINE   SHOP 

workman's      _  «  A^  -     /T?    ^  ^ 

NUMBER      ,J-22--NAME>^^    (^<vgww 

optRA-rioNs    ryi^i.t6t**'^ 


Rat r S^    V^l»,cM^\    roREMAN 


Size  3"  X  5". 

Fig.  33.  —Individual  Contract  Time  Slip. 

contract  each  day  can  be  obtained  at  once  by  one  sorting, 
and  then  by  listing  on  the  adding  machine  the  time  cost  of 
the  various  operations. 

The  fourth  method.  There  are  two  ways  in  which  the  tag 
can  be  used,  viz.,  not  as  a  production"  order,  or  as  a  produc- 
tion order.  According  to  the  first  scheme,  as  the  workman 
gives  the  piece  to  the  next  person  in  line  he  puts  on  the  tag 
(Fig.  34)  his  number  and  the  number  of  hours  he  worked, 
stating  the  operations  which  he  performed.  This  scheme 
tends  to  make  the  man  more  accurate  in  his  statements  be- 
cause the  tag  is  always  with  the  job,  and  must  be  filled  out 


250    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

before  being  handed  to  the  next  worker.  It  saves  labor  for 
the  clerks  in  analyzing  the  time  by  contracts,  because  each 
tag  stands  for  one  contract  only,  and  the  total  time  on  the 
tag  represents  the  total  direct  labor  cost  of  the  contract  up  to 
the  last  operation  performed.    The  scheme  does  not,  however, 


X 

isi  N 

P«seri|p4-;oo  o*  Wo^Jt                             \ 

I 

fAt-vt 

waxK 

MO 

noun 

o»Te  1 

opeiMTiow 

Fig.  34. — This  tag  is  not  detachable.  It  shows 
the  length  of  time  and  wage  cost  of  each 
operation.  By  sorting  these  tags  by  work- 
man's number  one  can  check  the  correctness 
of  the  recording  clock  or  time  book. 

necessarily  make  the  men  more  accurate,  if  they  desire  to 
deceive;  because  with  a  number  of  contracts  on  their  hands 
at  the  same  time,  some  being  worked  upon  and  some  await- 
ing their  efforts,  the  men,  especially  if  they  are  working 
under  a  premium  plan  or  any  kind  of  j^iece-rate  scheme,  will 
be  tempted  to  allot  time  in  such  a  way  that  the  contracts  do 


RECORD   OF  THE   WORKERS  251 

not  really  get  charged  with  their  proper  shares  of  time.  For 
instance,  in  one  place  men  were  paid  a  certain  price  for 
reaming  out  holes  on  a  certain  class  of  work.  They  were 
paid  another  price  for  reaming  under  other  conditions.  It 
happened  that  the  time  allotted  for  the  first  job  was  so  very 
generous  that  in  spite  of  the  fact  that  the  second  one  was 
actually  unfair,  the  men  never  complained  because  both  kinds 
of  holes  invariably  went  together,  and  instead  of  stating  the 
exact  time  it  took  to  do  each  class  of  holes  they  understated 
their  actual  time  where  they  had  the  meager  allowance,  and 
overstated  it  where  they  had  the  generous  one.  In  the  long 
run  they  obtained  unusually  high  wages,  and  the  cost  was 
exceedingly  unfairly  distributed  on  the  work. 

The  multiple  part  tag  used  as  a  production  order  is  ar- 
ranged as  in  Fig.  35.  Every  piece  of  work  must  go  through 
a  certain  number  of  steps  or  processes.  If  the  work  is  stan- 
dardized, regularly  printed  tags  may  be  attached  to  each  piece 
of  material,  as,  for  example,  in  a  stocking  factory.  If  the 
shop  manufactures  things  which  vary,  the  multiple  part  tag 
may  be  printed  in  blank  and  the  steps  filled  in  on  the  blank 
as  they  are  performed.  When  a  man  performs  his  j)art  of  the 
task,  he  merely  tears  off  the  step  which  he  performed,  and 
then  affixes  his  number  with  the  hours  worked.  In  this  way 
the  time  department  receives  a  record  by  contract,  and  like- 
wise by  men  by  first  arranging  all  the  slips  l^y  contracts,  and 
summarizing  them  on  the  contract  sheet  (see  Fig.  32) ,  and 
then  rearranging  them  by  men  and  carrying  the  wages  to 
each  man's  personal  account.  This  form  of  tag  is  very  good 
for  continuous  process  industries  or  for  work  of  a  machine 
order.  When,  however,  it  is  a  question  of  the  erecting  of 
engines  where  several  people  work  on  the  job  at  once,  and 
where  it  takes  some  time  to  finish  the  job,  the  tags  do  not  fill 
all  the  requirements,  because  it  is  difficult  to  enter  more  than 
one  man's  number  on  a  space.  For  work  of  such  a  character 
a  good  scheme  is  to  put  the  task  un^er  the  immediate  control 


£52    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

of  a  gang  boss  who  will  be  held  responsible  for  carr}'^ing  out 
the  details.  It  is  well  in  connection  with  this  plan  to  use 
Scheme  No.  6,  wherein  the  workman  secures  from  the  time 
clerk  a  slip  of  paper  indicating  the  task  his  gang  boss  gave 
him  and  the  time  when  he  began  it.    As  soon  as  he  completes 


( 

191      1 

ea*mu>t"r  no              .    ,,,. 

p«»:rip+K)«>of    ^arrt. 

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L«rT 

HOUfH 

<4n»  B*CKiNe 

ncxpiNft 

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i^EAyiMG 

RlBbER 

Fig.  35.— Tag  detachable  along  dotted  lines.  It 
serves  as  a  production  order,  besides  show- 
ing time  of  each  operation. 


the  task  he  should  be  required  to  return  the  paper  to  the 
clerk,  who  will  stamp  the  time  returned,  and  the  elapsed 
period  of  duration  will  show  the  length  of  time  it  took  to 
perform  the  work.      (See  Fig.  36.) 

In  this  way,  the  gang  boss  need  not  keep  the  time  nor  be 
held  responsible  for  its  keeping.  The  workman  cannot  ap- 
portion the  hours  as  he  fancies,  because  he  can  start  no  task 


RECORD   OF  THE  WORKERS 


253 


without  his  order  slip,  on  which  must  be  stamped,  as  he  gets 
it,  the  time  he  received  it. 

In  order  to  use  any  of  these  devices  to  determine  the 
efficiency  of  the  men  it  is  necessary  to  make  a  record  of  the 
men.  Two  schemes  may  be  used.  If  the  work  is  paid  on 
the  piece  basis,  one  of  the  best  records  of  a  man's  efficiency 
is  the  amount  of  wages  he  draws.  This  record  can  be  kept 
in  a  wage-record  book  (Fig.  37),  where  the  names  of  all  the 
men  in  each  class  are  grouped,  or  an  output  record  may  be 


machine:    shop 


.191 


Workman's   No. 

OPERATION 


Contract    No- 


Tirne    Storted 


Time      Returned  Elapsed        Time 


For     Co»t     Clei-W        Only 
Rate.      


Otr-ec+    Labor. 
Toi-a  I     


Fig.  36. — Individual  Operation  Time  Slip  for  each  Contract. 


made   on   a   separate  monthly  memorandum  output   card. 
(See  Fig.  38.) 

If,  however,  the  man  is  paid  on  the  day  plan,  it  is  neces- 
sary to  standardize  the  tasks  and  compare  workmen  who  do 
similar  classes  of  work.  If  it  is  hard  to  standardize  the 
tasks,  as  it  is  in  the  erecting  of  large  machines,  the  gang 
bosses  in  charge  of  the  erection  may  be  charged  with  their 
labor  costs  (see  Fig.  32) ,  and  comparative  records  made  with 
other  men  who  have  worked,  or  are  working,  on  similar  con- 


RECORD  OF  THE  WORKERS 


255 


tracts.  The  gang  boss  can  be  held  responsible  for  too  high 
a  cost;  and  if  an  exact  and  definite  record  is  kept,  he  can  at 
once  be  notified  when  his  costs  are  running  high,  and  be 
asked  to  give  the  reasons  for  it.  If  there  is  any  complaint 
to  make  against  any  particular  men,  the  foreman  can  shift 
the  men  reported  delinquent  to  other  gang  bosses;  and  if 
through  several  trials  the  labor  costs  increase  with  these 
workmen,  proper  means  can  then  be  taken  to  improve  the 
labor  force.  This  method  of  comparison,  sometimes  termed 
the  deadly  parallel,  does  away  with  elaborate  records  and 
obviates  the  necessity  of  marking  systems  for  the  individual 


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Fig.  38. — Monthly  Memorandum  Card  showing  Efficiency  of  Piece 

Worker. 


men.  Some  firms  adopt  a  system  of  grades  and  marks  based 
upon  an  estimate  more  or  less  accurate  of  what  each  man 
does,  and  the  number  of  mistakes  he  makes.  While  this 
scheme  may  have  some  advantages,  it  is,  for  industrial  en- 
terprises, cumbersome  and  expensive  to  keep  up,  and  it  is 
really  less  satisfactory  than  the  report  system  above  outlined. 
Of  course,  in  connection  with  the  scheme  suggested,  there  is 
an  individual  card  kept  for  the  workman  or  foreman ;  and  if 
he  is  responsible  for  any  destruction  of  material  or  breakage 
of  tools  it  is  recorded  against  him.      (See  Fig.  88.) 

A  good  way  to  know  accurately  of  a  man's  spoiled  work 
and  mistakes  is  to  have  a  spoiled  work  slip  made  out  for  his 
work  as  it  is  spoiled.  (See  Fig.  39.)  This  should  be  signed 
by  the  workman  and  the  inspector  with  the  reasons  for  the 


256    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

rejection  and  the  slip  filed  as  an  original  record.  At  the  end 
of  the  month  the  slips  can  be  summarized,  and  a  record  made 
on  his  individual  report  card.  (See  Fig.  38.)  These  indi- 
vidual cards  soon  indicate  to  the  foremen  the  inefficient 
subordinates,  who  should  gradually  be  weeded  out  of  their 
departments,  and  deserving  ones  promoted  as  opportunity 
occurs.     Every  time  a  change  is  made  in  relation  to  any 


SPOILED       WORK      TICKET 

DEPARTMENT  


WORKMAM3       NO MACHINE       NO. 


ARTlCL-e       NO.    DEFECTIVE. 

NATURE        £>»'      •DErECT      - 

CAUSE        ^___^_^-^__^^__— ___— ^— — — ^— 


INSPECTOR 


To     be     filled      ira     by     Co3+    Clei-k      on\y 

Value    of-  +ime   o-f 

Workman  _^__^_____ 

Volue     of    work   done,  on  To+al 

eocb  unit    +o   date       ____^_____    L.oss 


SIZ£    3kS 

Fig.  39. 

man's  position,  it  should  be  entered  on  his  permanent  file 
card.  (See  Fig.  40. )  At  the  end  of  each  year  the  general 
average  of  the  man,  as  shown  by  his  output  record  (Fig.  38), 
should  be  entered  on  the  back  of  his  Permanent  Record  Card 
filed  in  the  Employment  Bureau's  office.  (See  Fig.  40.) 
This  last  card  should  not  be  destroyed,  unless  the  employee 
is  known  to  be  dead.  While  he  is  retained  in  the  plant,  it 
should  be  filed  in  one  drawer,  and  when  he  is  released  it 
should  be  taken  out  of  the  employed  file  and  entered  in  the 
unemployed  file,  so  that  whenever  a  man  seeks  reemployment 
he  can  be  at  once  investigated.     Some  firms  obviate  the  ne- 


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RECORD  OF  THE  WORKERS 


259 


cessity  of  copying  the  workman's  record  twice  by  combining 
the  essential  features  of  the  two  cards  shown  in  Figs.  88  and 
40,  and  filing  them  in  the  foreman's  or  manager's  office 
while  the  men  are  engaged;  and  in  event  of  discharge  or 
quitting  they  are  sent  to  the  employment  office.  In  this  way 
the  employment  office  has  on  file  only  the  former  employees, 
while  the  managers  keep  in  touch  with  the  present  help. 
This  method  of  handling  cards  has  its  advantages  and  dis- 


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Fig.  42.— Chart  of  Errors  showing  Monthly  Efficiencies  of 
Departments. 

advantages.  It  is  cheaper  in  cards,  filing  space,  and  copy- 
ing, but  the  cards  are  apt  to  become  soiled,  torn,  mislaid, 
and  even  permanently  lost  in  the  general  handling  and  pas- 
sage between  departments.  If  the  employment  office  retains 
its  copy  at  all  times,  then  the  loss  of  the  output  card  in  the 
shop  is  not  so  serious  as  it  is  when  only  one  card  is  kept. 

While  the  manager  should  have  a  record  of  the  efficiency 
of  each  man  in  the  plant,  that  is  not  sufficient.  He  should 
know  just  how  much  each  department  wastes  and  loses,  and 
what  have  been  the  causes  for  all  losses.  A  foreman's  effi- 
ciency is  determined  by  his  ability  to  prevent  men  from 
wasting  time  and  spoiling  material. 


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RECORD   OF  THE  WORKERS  261 

Two  plans  of  recording  defects  can  be  used,  either  sum- 
marize the  errors  in  tables  (see  Fig.  41),  or  make  a  chart  of 
the  defects  chargeable  to  each  department  according  to  their 
number  or  cost,  or  both  number  and  cost.  (See  Fig.  42.) 
To  make  the  charts  involves  but  slightly  added  expense  above 
the  cost  of  tabulation,  because  the  information  must  be  tabu- 
lated before  it  can  be  charted.  The  added  advantage,  how- 
ever, is  worth  more  than  the  increased  cost;  because  a  chart 
shows,  at  a  glance,  tendencies  over  periods  of  months,  while 
the  table  compares  for  only  one  month  at  a  time. 

If  a  manager  keeps  these  general  comparative  records, 
and  if,  in  addition,  he  has  a  detailed  record  of  why  the 
losses  occurred  in  each  department  (see  Fig.  43),  he  can 
intelligently  criticise  the  work  of  his  lieutenants  and  can 
make  changes  which  will  be  improvements  and  not  mere 
"shake-ups." 


CHAPTER  XVII 

RECORD   OF   RAW   MATERIALS 

In  the  process  of  manufacturing  goods,  two  classes  of 
material  are  used,  direct  and  indirect  materials.  The  direct 
are  those  which  go  into  the  manufacturing  of  a  product,  and 
stay  with  it  when  it  is  in  its  marketable  form.  The  indirect 
are  goods  used  in  the  process  of  manufacturing,  but  which 
never  become  a  part  of  the  product.  In  making  a  desk,  for 
instance,  lumber,  nails,  varnish,  rotten  stone,  sand  paper, 
polishing  cloth,  and  other  materials  are  used.  The  lumber, 
nails,  and  locks  are  part  of  the  desk  when  finished;  while  the 
rotten  stone,  sand  paper,  and  polishing  cloths  though  neces- 
sary in  order  to  put  a  beautiful  finish  on  the  desk,  do  not 
appear  as  part  of  it  when  ready  for  the  consumer. 

In  making  an  engine  it  is  necessary  to  use  iron,  steel, 
brass,  and  other  metals,  and  also  molds,  oilS;  waste,  and 
other  materials  which  are  quite  as  necessary  as  are  the  steel, 
iron,  and  brass,  although  they  appear  nowhere  in  the  make- 
up of  the  engine. 

Good  management  insists  upon  two  things  regarding  raw 
materials : 

1.  The  greatest  care  possible  should  be  exercised  in  pre- 
venting waste  and  losses  on  direct  material. 

2.  The  greatest  possible  economy  to  prevent  undue  expen- 
ditures for  the  indirect  materials. 

To  secure  maximum  economy  in  materials  it  is  necessary 
to: 

1.  Purchase  them  from  the  lowest-priced  firms  whea 
^oods  axe  at  their  lowest  prices. 

2^ 


RECORD  OF  RAW  MATERIALS  263 

2.  See  that  the  material  comes  up  to  the  contracted 
standard  of  excellence  in  quality. 

3.  See  that  the  quantity  purchased  is  obtained. 

4.  See  that  the  goods  are  delivered  at  the  specified  time. 

5.  See  that  they  are  properly  housed  and  stored. 

6.  See  that  there  is  no  unnecessary  waste  in  the  plant. 

7.  See  that  no  losses  can  occur,  except  through  waste. 

In  order  to  accomplish  these  seven  ends  it  is  necessary  to 
have  a  complete  record  of  the  most  reasonable  supply  firms, 
to  know  the  best  time  to  purchase  goods,  and  to  have  an 
exact  checking  system. 

1.  To  attain  the  first  aim,  the  purchasing  department 
should  be  in  constant  touch  with  the  market  from  which  the 
raw  materials  are  obtained.  In  small  concerns,  some  mem- 
ber should  gather  information  as  to  the  causes  that  influence 
the  prices  of  raw  materials.  He  should  find  out  the  seasons 
when  they  are  cheapest,  should  know  the  prices  of  the  vari- 
ous usable  qualities,  and  keep  himself  informed  as  to  weather 
conditions,  crop  failures,  and  other  causes  likely  to  affect 
prices.  The  firm  should  also  take  advantage  of  the  market, 
e.g.,  if  a  cotton  manufacturer  finds  that  he  can  purchase  his 
cotton  most  advantageously  during  a  certain  month  in  the 
year,  he  should  arrange  his  finances  so  that  he  can  acquire 
his  cotton  at  that  time,  but  he  should  probably  not  purchase 
an  entire  year's  stock  of  raw  material  during  a  single  month 
or  so,  and  then  pay  storage  on  his  purchased  goods  and 
interest  on  the  money  Uised  to  secure  them. 

Most  companies  have  a  regular  purchasing  agent  or  pur- 
chasing department  to  look  after  securing  supplies.  In  some 
concerns,  a  very  strict  account  is  kept  of  the  price  quotations 
for  every  day  in  the  year;  and  in  some  cases,  the  price 
changes  are  charted  on  squared  paper,  and  curves  are  plotted 
showing  price  movements  for  each  day  of  the  year.  For 
most  lines  of  material,  and  for  all  ordinary  businesses,  such 
9,  scheme  is  mmecessary.     Some  goods  have  higher  prices 


264    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

during  some  seasons  than  others,  and  the  management  of  the 
plant  should  endeavor  to  buy  during  the  favorable  time,  al- 
though if  he  must  borrow  funds,  the  price  he  pays  for  his 
goods  will  be  the  market  price  plus  interest,  as  well  as  stor- 
age and  insurance. 

2.  Quite  as  important  as  purchasing  the  material  at  the 
right  time  and  at  the  lowest  possible  price  is  to  have  some 
scheme  by  which  one  can  be  certain  of  purchasing  the  most 
useful  quality  of  material.  The  common  plan  is  for  the  pur- 
chasing department  to  establish  standards  for  all  of  the  ma- 
terials to  be  purchased,  and  then  have  all  goods  tested  before 
acceptance.  Many  large  concerns  have  well-equipped  labora- 
tories that  establish  standards  and  test  all  purchased  materials 
in  order  to  see  that  they  fulfil  the  terms  of  the  specifications. 
In  many  branches  of  work  it  is  not  only  desirable  to  make  a 
preliminary  test  of  the  material,  but  also  to  keep  track  of  the 
material  while  it  is  going  through  the  plant,  and  to  test  the 
finished  product  of  which  it  becomes  a  part.  This  is  espe- 
cially important  for  plants  having  no  special  department 
for  testing  materials  and  such  goods  as  are  hard  to  stand- 
ardize. 

It  is  not  difficult  to  keep  track  of  materials.  A  continu- 
ous industry  plant,  which  manufactures  several  styles  and 
grades  of  some  textile  material,  can  keep  record  of  the  raw 
material  which  goes  into  the  various  lots  of  goods  by  num- 
bering the  lots  and  recording  specifically  the  material  charged 
to  these  lots.  Whoever  buys  the  finished  product  will  have 
the  lot  number  recorded  against  his  name.  If  the  finished 
product  from  this  raw  material  should  turn  out  to  be  bad,  or 
to  be  unsatisfactory  to  the  customers  either  in  wearing  qual- 
ities or  in  other  respects,  they  will  report  to  the  manufactu- 
rer who  is  able  to  tell,  by  turning  to  the  Index  Record  (Fig, 
44),  which  shows  the  customer's  name  and  lot  number, 
what  raw  goods  proved  to  be  unsatisfactory,  and,  as  he 
keeps  a  record  of  his  purchases;^  he  is  able  to  tell  from 


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266     THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

whom  he  bought  the  unsatisfactory  raw  material.     (See  Fig. 
45.) 

To  illustrate  the  records  needed  for  an  assembling  in- 
dustry an  automobile  plant  may  be  selected.  The  parts  of 
an  automobile  are  purchased  from  widely  different  sources. 
If  the  product  should  prove  unsatisfactory,  the  manager  will 
hear  specific  complaints  in  the  form  of  objections  about  some 
particular  parts  of  the  machine.  If  the  defect  is  real,  in- 
vestigation will  soon  show  whether  it  is  due  to  faulty  ma- 
terial or  to  workmanship,  and  if  proper  records  are  kept  of 
the  source  of  the  former,  it  is  not  hard  to  discover  where  the 
fault  lies.  The  fact  that  the  material  is  bought  from  widely 
different  sources  does  not  offer  any  serious  objection,  because 
the  firm,  as  a  rule,  buys  the  same  parts  from  a  very  limited 
number  of  firms,  e.g.,  the  engines  and  engine  parts  will  come 
from  one  or  two  firms,  and  their  products  have  characteristics 
which  soon  betray  their  origin. 

8.  See  that  the  quantity  purchased  is  obtained.  One  of 
the  most  fruitful  causes  of  losses  in  large  concerns  which  do 
not  have  a  good  receiving  system  is  shortness  in  weight  or 
amount  due  either  to  mistakes  or  open  dishonesty  on  the 
part  of  their  employees  and  others.  In  order  to  see  that  the 
firm  gets  all  the  goods  for  which  it  pays,  the  usual  plan  is  to 
establish  a  store-room  and  to  let  the  order  go  through  the 
following  routine:  Have  the  purchasing  department  make 
out  the  items  in  triplicate  on  a  special  blank,  sending  one 
copy  to  the  firm  from  which  they  order,  one  to  the  receiving 
department,  and  retaining  one  on  their  own  files.  When  the 
consignment  arrives,  the  man  in  the  store-room  should  be 
compelled  to  take  his  copy  of  the  order,  compare  it  with  the 
invoice,  and  then  check  the  actual  items  of  the  invoice 
against  the  goods  received,  sign  the  two  slips,  and  send  them 
u})  to  the  purchasing  department,  where  they  are  checked 
against  the  purchasing  department's  copy,  and  approved. 
The  invoice  will  be  sent  to  the  accounting  department,  which 


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268    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

will  select  the  paying  day  and  credit  the  firm  for  the  amount, 
while  the  other  slip  will  be  returned  to  the  store-room,  where 
it  will  be  kept  on  file.  The  store-room  records  should  be 
kept  in  the  fonu  of  some  kind  of  perpetual  inventory. 

A  perpetual  inventory  is  a  record  which  shows  at  once 
the  amount  and  value  or  the  amount  or  value  of  goods  on 
hand  at  any  time.  (See  Fig.  46. )  To  have  these  perpetual 
inventories  correct,  there  must  be  kept  for  each  class  of  goods : 

(a)  A  statement  of  all  the  goods  received. 

(b)  A  statement  of  all  goods  issued. 

(c)  A  balance  of  goods  on  hand. 

The  accuracy  of  the  book  inventory  is  tested  from  time  to 
time  by  an  actual  counting  and  valuing  of  the  stock  on 
hand,  and  a  comparison  of  the  results  obtained  by  this 
means  with  the  balances  shown  on  the  books. 

There  are  two  methods  of  keeping  an  inventory.  One  is, 
to  have  all  the  material  arranged  in  bins  and  racks,  and  to 
have  in  front  of  every  bin  and  rack  a  card  or  tag  on  which  is 
placed  the  amounts  of  materials  received,  with  dates  and  the 
amounts  taken  out  with  their  dates.  Two  bins  are  often  used 
to  simplify  the  keeping  track  of  the  material,  one  bin  being 
used  to  receive  goods  while  they  are  being  taken  from  the 
other.  When  the  delivering  bin  is  emptied,  it  is  used  to 
receive  material,  while  the  now  emptied  one  becomes  the  re- 
ceiving bin.  The  double  bin  idea  is  good,  if  there  is  suffi- 
cient space  available  in  the  stock-room,  because  it  lessens 
the  accumulation  of  shop-worn  stock. 

The  record  tag,  however,  is  objectionable  from  two  stand- 
points. In  the  first  place,  the  tags  are  so  widely  distributed 
that  it  is  inconvenient  to  see  just  how  the  stock  stands,  as 
shown  by  the  records.'  It  is  inadvisable  to  remove  the  tags 
from  the  bins  in  order  to  ascertain  the  situation,  because  in 
the  meantime  someone  may  withdraw  things;  and,  having 
no  slip  on  which  to  enter  withdrawals,  fails  to  make  any  rec- 
ord, with  a  consequent  inaccuracy  in  the  records.     It  also 


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270    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

frequently  happens  that  the  amounts  are  put  down  on  the 
slips  carelessly,  and  sometimes  even  by  unauthorized  per- 
sons. Of  course,  this  latter  difficulty  could  be  overcome  by 
not  giving  access  to  the  store-rooms  to  anyone  who  has  not 
proper  authority,  or  who  is  not  responsible  for  goods. 

An  inventoiy  without  these  objections  is  a  book  ruled 
somewhat  according  to  the  form  of  Fig.  46.  The  book  is 
put  in  charge  of  a  storekeeper  or  a  clerk,  and  no  irrespon- 
sible person  is  permitted  to  take  anything  from  the  store- 
room. Everything  received  is  entered  in  the  book  from 
the  invoices,  and  everything  given  out  must  have  a  properly 
written  requisition.  Both  the  purchasing  agent's  authority 
checked  against  the  invoices,  and  the  requisitions  are  kept 
until  the  books  are  audited.  The  difference  between  these 
two  shows  the  book  balance,  and  should  always  be  repre- 
sented by  the  actual  amount  of  goods  on  hand  in  the  stock- 
room. The  balance  can  be  verified  by  inspection;  and  if, 
for  any  reason,  there  is  a  discrepancy,  an  investigation  is  in 
order. 

^  4.  ^Vhile  a  firm  may  lose  much  on  the  value  of  the  goods 
purchased  if  it  does  not  have  a  well-planned  receiving  de- 
partment, it  may  lose  the  profit  of  an  entire  contract  if  the 
raw  material  does  not  arrive  in  time  for  use  when  wanted. 
In  order  to  get  material  delivered  in  time,  the  purchasing 
department  should  be  notified  long  enough  in  advance  to  be 
able  to  anticipate  all  needs.  With  an  inventory  ledger  of  the 
type  shown  in  Fig.  46,  the  storekeeper  has  little  difficulty 
in  keeping  the  purchasing  department  informed  as  to  when 
it  should  go  into  the  market  for  more  goods.  Whenever  the 
storekeeper  finds  his  balance  to  be  below  the  minimum  limit, 
he  must  at  once  report  the  approaching  deficiency,  thus  giv- 
ing the  buyer  ample  time  to  replenish  the  stock.  The  pur- 
chasing agent  should  see  that  the  minimum  limit  is  set  suffi- 
ciently high  so  that  the  store-room  will  never  be  completely 
out  of  anything  that  may  be  needed.     The  usual  practice  ia 


RECORD  OP  RAW  MATERIALS         271 

bo  liave  the  storekeeper  fill  out  a  blank,  telling  the  kind  of 
stock  needed  and  the  maximum  and  minimum  amounts  car- 
ried. These  reports  are  made  out  in  duplicate,  one  for  the 
information  of  the  purchasing  department,  and  one  to  be 
retained  by  the  storekeeper  for  his  own  protection.  The 
maximum  point  for  the  stock  is  fixed  in  order  to  prevent 
overbuying. 

5.  After  adequate  provision  has  been  made  for  receiving 
goods  and  reporting  deficiencies  in  deliveries  and  lowness  in 
stock,  there  arises  the  problem  of  the  care  of  the  material. 
Losses  in  material  may  be  from  three  sources : 

(a)  Bad  storage,  which  causes  actual  deterioration  in  the 
goods. 

(b)  Storage  which  makes  it  possible  for  unauthorized 
people  to  have  access  to  the  store-room,  and  to  steal  or  pilfer 
materials. 

(c)  Losses  through  waste. 

If  goods  are  properly  stored,  the  first  and  second  of  these 
difficulties  will  be  reduced  to  a  minimum.  If  judgment  is 
exercised  in  storing  material,  it  will  be  found  unnecessary  to 
exercise  the  same  precautions  over  all  materials.  It  is  un- 
necessary in  a  machine  shop  to  store  the  rough  castings  with 
the  same  care  that  one  should  exercise  in  storing  heavy  ma- 
chinery, and  no  one  would  exercise  the  same  care  in  storing 
heavy  machinery  that  he  would  exhibit  in  storing  more  valu- 
able articles,  like  brass  ware,  oil  cups,  electric-light  bulbs, 
and  various  other  similar  supplies.  The  latter  stock  should 
be  kept  strictly  under  control,  and  it  should  be  impossible 
for  one  to  get  any  of  these  things  without  proj)er  authority, 
unless  by  actually  breaking  into  some  room  or  compartment. 

While  rough  castings  may  very  frequently  be  stored  out  in 
the  open,  it  is  inadvisable  to  do  so  unless  absolutely  neces- 
sary. There  is  an  instance  of  a  concern  which  had  made 
several  expensive  castings  of  hollow  wheel  segments  and 
arms,  wljiit  it  stored  in  the  open  in  such  a  way  that  the  hoi- 


272    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

low  arms  were  turned  upwards.  In  the  course  of  a  severe 
winter,  which  had  many  changes  in  temperature,  the  arms 
became  filled  with  water  which  froze  solid,  and  split  them 
beyond  all  possibility  of  repair,  entailing  a  complete  loss  to 
the  company.  Had  the  foreman  in  charge  taken  the  precau- 
tion to  cover  the  openings  with  boards,  it  would  have  pre- 
vented the  water  from  getting  in  at  all. 

There  are  certain  fabric  goods,  such  as  raw  wool,  cotton, 
and  yam,  which  must  be  kept  from  the  weather,  and  yet 
which  are  of  such  a  nature  that  there  is  no  necessity  for  tak- 
ing special  precautions  to  prevent  petty  thieving.  Workmen 
have  little  use  for  these  things  in  small  quantities,  because 
they  cannot  sell  small  lots  to  advantage;  and,  it  is  hard  for 
them  to  dispose  of  large  amounts,  because  they  usually  have 
to  establish  relations  with  people  who  will  dispose  of  such 
materials  for  them.  Silk,  however,  must  be  very  carefully 
watched  because  of  its  value. 

The  material  on  hand  should  be  studied  with  reference  to 
the  liability  of  pilfering.  The  storage-rooms  should  be  so 
arranged  with  shelving  and  racks  that  the  material  is  at  all 
times  easily  accessible  for  inventory,  and  is  at  the  same  time 
kept  from  contact  with  vermin,  overheat,  dampness,  or  any- 
thing that  will  hasten  the  deterioration  of  the  goods. 

Besides  arranging  the  goods  so  as  to  be  available,  safe 
from  the  weather  and  secure  from  theft,  the  storekeepers 
should  so  arrange  the  material  that  it  can  be  found  by  a 
comparative  stranger.  There  are  two  methods  of  doing  this. 
One  is  to  arrango  the  materials  according  to  some  alpha- 
betical plan,  as  for  example  putting  all  brass  work,  bolts, 
buckets,  brooms,  etc.,  in  one  section;  the  next  section  fol- 
lowing with  articles  beginning  with  C,  and  so  on.  For  a 
small  shop,  where  the  variety  of  goods  is  not  large,  this 
scheme  is  sufficient.  If,  however,  the  amount  of  stores  ia 
large,  or  the  variety  extensive,  of  which  some  are  being  called 
for  constantly  while  others  are  not  so  much  in  demand   it  in 


RECORD   OF   RAW   MATERIALS  273 

wise  economy  for  the  storekeeper  to  put  the  former  material 
close  at  hand,  and  the  less  used  in  the  more  remote  places. 
When  this  scheme  is  adopted,  the  best  plan  is  to  number  the 
bins  in  some  well-recognized  order,  and  to  have  an  index 
book,  which  lists  all  the  material  according  to  name,  size, 
and  quality  or  other  relations,  and  states,  opposite  the  de- 
scription, the  number  of  the  bin  or  section  in  which  the 
listed  material  is  to  be  found.  Such  a  scheme  saves  much 
space  in  storing,  and  the  goods  are  convenient  to  find  and 
easy  to  handle. 

6  and  7.  After  the  goods  have  been  properly  stored,  care 
must  be  taken  to  prevent  loss  of  material  by  unnecessary 
waste  and  theft.  Both  ends  can  be  accomplished  by  the  same 
method,  provided  precautions  are  taken  to  keep  everything 
under  the  absolute  control  of  the  storekeeper,  and  to  hold 
him  responsible  for  the  proper  issuance  of  goods. 

A  complete  record  of  materials  taken  from  a  store-room 
may  be  kept  in  two  ways.  One  is  the  s^oucher  or  requisition 
plan,  by  which  the  person  receives  the  goods  upon  the  presen- 
tation of  a  properly  authorized  voucher.  The  other  scheme, 
the  budget  system,  does  not  permit  the  issuance  of  materials 
on  vouchers.     The  two  plans  require  explanation. 

Formerly  foremen  and  workmen  found  all  supplies  open 
to  them  for  the  mere  asking.  Many  shops  and  mills  at  the 
present  time  may  be  found  wherein  the  workmen  need  only 
to  make  an  oral  request,  and  stock  will  be  given  out  without 
further  ceremony.  In  such  plants,  the  storekeeper  attempts 
to  make  a  record  by  charging  the  value  of  the  material  to  the 
contract  on  which  the  workman  says  he  is  employed.  The 
scheme  is  so  loose  that  men  frequently  obtain  many  things 
which  they  do  not  use  for  their  work  at  all.  In  one  instance 
there  were  men  working  on  some  things  which  were  exceed- 
ingly grimy  and  oily.  Their  hands  became  ingrained  with 
the  dirt.  A  happy  accident  revealed  to  them  that  the  grime 
could  readily  be  removed  by  the  application  of  lard  oil. 


274    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

At  some  time  every  day,  while  they  worked  on  that  job,  the 
storekeeper  issued  to  each  man  about  a  half  pint  of  the  oil, 
presumably  for  the  contract,  but  which  they  actually  used  to 
clean  their  hands.  At  that  time  lard  oil  of  that  quality  cost 
about  $1  a  gallon. 

No  one  who  has  tried  the  plan  of  unrestricted  issues  has 
found  it  satisfactory  where  the  raw  products  possess  any  ex- 
changeable or  usable  value,  outside  of  the  shop.     Losses  in 


\NORKS  RELQUISITION     ON    STORE    ROOM 


.191 


"Tht  mafmrial    lisiicl     belo»v    and  chartfe  '^ 
CONTRACT     NO.  


OUAN'T/Ty 


DESCRl PT  ION 


*  far    cosf  cterlr    only 


APPf^OVtO 


rOREMAN 


Size  3"  X  5" 

Fig.  47. 

stores  were  found  to  be  inevitable,  and  it  became  customary 
to  give  out  stores  only  to  workmen  having  authority  from 
the  foreman  in  charge  of  the  department,  or  from  some  other 
authorized  agent.  In  order  to  carry  out  this  scheme,  shop 
accountants  devised  the  plan  of  putting  in  the  hands  of 
the  foremen  regularly  printed  requisitions  ruled  much  like 
Fig.  47. 

A  workman  desiring  anything  for  his  job,  applies  to  the 
foreman  or  his  clerk,  who  fills  out  a  blank,  stating  the  ma- 
terial, with  the  amount  which  he  wants  given  to  the  man,  and 


RECORD  OF  RAW  MATERIALS         275 

then  signs  the  slip.  The  storekeeper  with  this  authority 
issues  the  requested  goods.  In  small  shops,  where  the  fore- 
man has  comparatively  few  things  to  look  after,  this  scheme 
can  be  used  with  excellent  results.  Men  will  not  call  for 
goods  or  supplies  which  they  do  not  need,  since  the  foreman, 
being  held  responsible  for  all  goods  given  out  over  his  signa- 
ture, is  not  likely  to  authorize  the  order  without  good  reason. 
When,  however,  a  shop  becomes  large,  the  foremen  are  apt 
merely  to  sign  their  initials  in  approval  of  requisitions  made 
out  by  the  men.  There  are  shops  which  use  the  requisition 
system  with  very  poor  results.  In  one  plant  where  this 
scheme  was  in  operation,  the  men  were  building  some  ma- 
chinery which  required  the  use  of  candles.  One  or  two  of 
the  workmen  found  after  a  few  trials  that  the  foreman  gave 
his  approval  without  trying  to  remember  whether  the  mate- 
rials had  been  duplicated  in  a  previous  voucher,  and  without 
giving  much  attention  to  the  items  in  the  list.  The  O.K. 
mark  was  given  in  a  perfunctory  way,  thus  the  workmen 
could  get  the  goods  by  going  through  a  mere  formality. 
Two  men  every  day  made  a  regular  practice  of  getting  some 
"lalf  dozen  candles  each,  which  they  put  in  their  dinner  pails 
and  took  home.  Others  obtained  brass  by  the  same  method, 
others  incandescent  lamps,  and  the  storekeeper,  who  would 
ordinarily  have  been  able  to  check  these  losses,  was  unable 
to  do  so  because  there  were,  on  an  average,  several  hundred 
requisitions  daily.  It  kept  all  the  store's  clerks  busy  deliv- 
ering the  amounts  authorized  without,  doing  anything  more, 
even  had  they  felt  so  inclined. 

In  a  large  shop  it  is  asking  too  much  of  the  foreman  to 
expect  him  to  look  after  such  leaks.  His  main  work  should 
be  to  see  that  the  men  are  supplied  with  the  equipment  to  do 
the  work,  that  everybody  is  being  properly  employed,  and 
that  the  work  is  going  along  with  the  least  possible  friction. 
If  he  is  asked  to  do  anything  else,  these  important  matters 
must  suffer.     The  storekeeper  can  hardly  be  asked  to  pass  a 


276    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

judicial  decision  as  to  whether  or  not  a  man  should  have  the 
supplies  called  for  on  a  properly  authorized  voucher.  If  he 
is  expected  to  go  back  of  the  voucher,  then  it  is  he  and  not 
the  foreman  who  really  has  the  authority  to  issue  goods. 
This  would  entail  endless  friction  and  needless  waste  of  time, 
and  would  cost  more  than  the  saving  would  be  worth.  The 
fault  is  not  with  the  men,  but  with  the  system. 

Since  the  requisition  system  fails  in  checking  losses,  a 
number  of  shops  have  sought  for  some  other  device.  The 
requisition  system  would  have  succeeded  had  it  been  possible 
to  prevent  orders  being  made  out  for  more  than  the  require- 
ments of  any  job;  because  the  storekeeper  can  be  held  re- 
sponsible for  all  over-issues,  though  the  foreman  cannot. 
The  problem  was  to  introduce  a  system  that  could  utilize  the 
storekeeper's  possibilities  and  obviate  the  need  of  depending 
upon  the  foreman. 

In  order  to  construct  a  large  engine  or  electrical  generator, 
engineers  must  carefully  draw  up  plans  months  in  advance, 
and  must  show  to  the  utmost  detail  everything  which  enters 
into  the  firm's  product.  In  these  plants  the  great  losses  have 
occurred  through  the  requisition  system.  In  textile  plants 
and  continuous  industry  plants  the  voucher  system  has  been 
very  successful  in  stopping  all  unnecessary  waste  and  losses. 
In  other  concerns,  however,  where  it  has  not  proven  a  suc- 
cess, the  managers  can  use  the  very  disadvantages  of  the 
work  to  aid  their  purpose.  In  the  drawing-room  after  the 
drawings  and  plans  are  all  completed,  clerks  go  over  the  draw- 
ings and  make  lists  of  the  material  which  goes  into  the  fin- 
ished product.  This  must  be  done  in  order  to  let  the  pur- 
chasing department  or  agent  know  just  what  to  buy.  Copies 
of  these  lists  of  materials  are  sent  to  the  foremen  of  the  vari- 
ous departments  so  that  they  may  know  what  to  prepare  for 
in  the  forthcoming  new  work.  Someone  hit  upon  the  happy 
device  of  having  several  copies  made  of  the  lists  of  materials. 
One  of  these  was  given  to  the  storekeeper.     The  list  for  each 


RECORD   OF  RAW  MATERIALS  277 

contract  is  ruled  as  in  Fig.  48,  and  is  given  to  the  store 
clerk  with  the  following  instructions:  "Issue  material  to  any- 
responsible  workman  who  calls  for  it,  provided  the  goods  are 
listed  on  the  sheet,  but  take  precautions  to  get  the  workman's 
number  against  every  amount  of  goods  he  takes  out.  When 
the  list  has  all  those  items  checked  off,  issue  no  more  goods 
unless  spoiled  material  is  returned,  or  some  satisfactory  ex- 
planation comes  from  the  foreman  over  his  signature  as  to 
why  the  extra  material  is  needed." 

This  is  the  budget  system,  and  it  has  a  number  of  advan- 
tages. 

1.  It  absolutely  prevents  stealing,  because  no  one  gets 
goods  unless  he  is  responsible  for  them. 

2.  It  lessens  waste  to  a  remarkable  degree,  because  any 
unnecessary  calls  for  material  are  at  once  noted,  and  require 
much  careful  explanation  as  to  why  they  are  required,  and 
men  are  not  apt  to  be  careless  when  they  find  their  actions 
subjected  to  such  close  scrutiny. 

3.  It  inevitably  brings  scrutiny  and  questioning  when  the 
loss  occurs.     A  man  cannot  shift  his  responsibility. 

4.  It  enables  the  storekeeper  to  tell  well  in  advance 
just  what  materials  he  needs,  so  he  can  get  ready  for  the  de- 
mands. 

5.  It  lessens  the  accounting,  because  it  eliminates  the 
handling  of  the  vouchers,  their  listing  and  adding  at  the  end 
of  every  day.  In  fact,  the  storekeeper  can  make  up  his  books 
days  in  advance  if  he  so  desires. 

6.  It  enables  the  people  in  charge  to  keep  close  watch  on 
all  material,  because  by  it  one  can  predict  what  should  be 
the  condition  of  the  stock  at  any  time;  and,  if  it  is  not  in 
that  condition  on  the  appointed  day,  explanations  must  be 
made  for  shortage  in  stock  or  for  delay  in  completing  the 
contract. 

To  be  sure,  it  has  some  disadvantages. 

X.  It  cannot  be  operated  successfully  unless  the  a/Jtual 


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RECORD   OF   RAW   MATERIALS  279 

amounts  of  material  needed  for  any  undertaking  can  be 
closely  estimated. 

2.  In  special  emergencies  it  does  not  work  fast  enough. 

On  account  of  the  former  defect,  shop  managers  use  a 
modification  of  the  budget  plan  to  keep  a  wateh  on  materials 
like  oil,  waste,  and  things  which  cannot  be  definitely  allotted 
to  jobs.  An  approved  plan  in  use  to  prevent  extravagance  is 
to  issue  to  each  man  a  certain  amount  of  these  materials 
every  week,  and  give  him  no  more  until  the  next  distribu- 
tion day.  One  firm  adopts  the  scheme  of  giving  the  floor 
hands  a  couple  of  pounds  of  waste  every  Saturday,  and  per- 
mits them  to  have  their  oil  cans  filled  on  certain  scheduled 
days.  Those  who  have  charge  of  the  machines  are  given 
different  allotments,  and  are  permitted  to  get  oil  at  any  time 
they  desire. 

In  a  shop  where  large  work,  made  up  of  many  parts,  is 
being  handled,  or  where  there  is  a  great  number  of  regular 
orders  going  through  daily,  the  budget  system  is  without 
question  the  most  efficient  material  record  that  can  be  de- 
vised. There  are  conditions,  however,  when  the  system  be- 
comes an  annoyance  and  expense  if  literally  carried  out. 
Suppose,  for  an  extreme  instance,  that  an  urgent  repair  job 
is  brought  into  the  shop  about  Saturday  noon,  after  all  the 
clerks  and  draftsmen  have  left  until  Monday  morning.  To 
wait  until  the  complete  lists  of  materials  are  made  out  for 
such  a  case  would  be  stupid  folly,  for  the  plant  which  needs 
the  repairs  will  want  to  be  running  by  the  time  the  clerks 
would  ordinarily  have  the  budget  ready  to  send  into  the  shop. 

For  repairs  or  special  rush  orders  of  any  kind,  a  good 
plan  to  prevent  loss  of  material  and  at  the  same  time  get  the 
work  out  in  a  hurry  is  to  give  the  foreman  or  some  respon- 
sible official  in  charge  of  the  departments  the  privilege  of 
making  special  requisitions  for  such  emergencies.  After  the 
contingency  has  been  taken  care  of,  the  special  requisitions 
can  be  assembled  and  the  amount  of  used  material  accurately 


280    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

determined  and  priced.  If,  on  comparing  the  issues  and 
costs,  as  shown  by  these  special  vouchers  with  similar  repair 
jobs  or  ordinary  output,  it  is  found  that  the  issues  have 
been  unusually  large,  an  investigation  should  be  made  and 
explanations  sought.  \\Tiile  such  inquiry  does  not  of  course 
prevent  loss  or  waste  on  a  contract  that  has  left  the  shops, 
it  tells  the  management  who  is  responsible  for  losses,  and 
if  the  man  at  fault  does  not  prevent  future  overissues,  he 
should  be  discharged. 

These  unexpected  difficulties  are  apt  to  arise  at  any  time, 
and  no  system  can  be  devised  to  take  care  of  them  all  in  the 
ordinary  routine,  without  either  delay  or  friction,  or  both. 
For  such  instances  every  system  should  provide  some  short 
cut,  as  above  outlined.  It  is  under  these  conditions  that  the 
manager  proves  his  worth.  In  fact,  he  is  not  really  capable 
of  filling  his  position  unless  he  knows  how  to  make  short 
cuts  at  the  proper  time,  and  just  when  he  should  modify  his 
standard  system,  whatever  it  may  be,  to  take  care  of  unex- 
pected events. 


CHAPTER  XVIII 

RECORD   OF   FINISHED   AND   UNFINISHED 
GOODS 

After  providing  for  keeping  track  of  the  labor  force  and 
of  the  raw  materials,  there  still  remain  the  partly  finished 
goods,  the  finished  goods,  and  the  machinery^,  including 
equipment.  It  is  necessary  to  keep  track  of  the  partly  fin- 
ished goods  for  several  reasons: 

1.  To  keep  the  management  informed  as  to  the  probable 
time  when  various  goods  will  be  ready  for  delivery. 

2.  To  keep  track  of  the  approximate  value  of  the  goods 
at  any  time. 

3.  To  determine  whether  departments  are  over  or  under 
equipped  with  men  and  machinery. 

4.  To  enable  the  management  to  determine  the  value  of  a 
new  contract  and  to  localize  waste  in  production. 

First,  it  is  necessary  to  know  the  approximate  time  when 
deliveries  can  be  made,  in  order  that  the  company  may  be 
able  to  satisfy  customers  as  to  its  ability  to  deliver  goods. 

Second,  it  is  highly  desirable  to  know  the  value  of  any 
goods  up  to  their  particular  state  of  completion,  because  it 
enables  the  management  to  determine  what  are  the  most  ex- 
pensive steps  in  the  process,  and  makes  it  possible  to  de- 
termine in  case  of  fire  what  his  losses  have  been  in  partly 
finished  goods. 

Third,  it  is  well  to  know  which  are  the  undermanned  and 
equipped  and  overmanned  and  equipped  departments  with 
relation  to  each  other.  One  cannot  be  too  careful  as  to  the 
way  in  which  money  is  spent  to  balance  the  plant.  If  a  con- 
cern does  not  know  its  strong  and  weak  points  in  production, 

281 


282    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

it  is  in  danger  of  spending  money  uselessly  or  of  giving 
appropriations  to  some  well-equipped  department  for  further 
improvements,  which  it  really  does  not  need  and  cannot  use 
because  of  the  condition  of  the  rest  of  the  plant.  True  econ- 
omy does  not  consist  in  buying  the  latest  improvements  in 
machinery  unless  the  whole  plant  is  fully  capable  of  utilizing 
the  improvement  to  the  best  advantage. 

Partly  finished  products  give  rise  to  a  complicated  prob- 
lem of  accounting.  Goods  bought  at  a  certain  price  as  raw 
material  have  their  value  constantly  increased  by  the  addi- 
tion of  labor,  power,  and  of  certain  costs  in  the  form  of  over- 
head expenses,  insurance,  reserves  for  depreciation,  interest, 
and  the  like.  One  day  the  goods  are  worth  little  more  than 
the  raw  material.  A  week  later  they  may  be  completed.  If 
a  particiilar  kind  of  product  is  being  manufactured,  various 
amounts  of  a  large  order  are  worth  different  values  at  the 
same  time,  because  the  material  is  going  through  in  lots,  so 
that  it  is  not  in  the  same  state  of  completion  at  any  given 
period. 

From  the  standpoint  of  the  nature  of  orders  sent  into 
plants,  there  are  two  kinds  of  manufacturing  possible: 

1.  For  a  general  stock  from  which  the  goods  are  taken  as 
the  sales  are  reported.  Examples  of  this  type  are  furnished 
in  the  making  of  hats,  shoes,  textiles,  furniture,  pianos,  and 
almost  all  ordinary  goods  consumed  in  a  community. 

2.  For  a  specific  contract,  as  illustrated  in  the  produc- 
tion of  locomotives,  large  machinery,  steamboats,  and  in 
building  operations. 

If  it  be  desired  to  keep  close  watch  on  all  the  goods  in 
the  partly  finished  state  with  their  degrees  of  completion, 
there  must  be  a  perpetual  inventory  or  record  of  unfinished 
work.  To  accomplish  this,  it  is  necessary  to  carry  into  effect 
two  ideas  that  have  been  found  imperative  elsewhere  for  the 
attainment  of  successful  management: 

1.  Divide  the  plant  into  departments. 


RECORD  OF  FINISHED  AND  UNFINISHED  GOODS    283 

2.  Use  the  production  order  and  have  each  finished  oper- 
ation reported  by  departments  to  the  accounting  division. 

The  departmental  method  of  running  an  organization 
is  to  divide  the  establishment  into  a  number  of  sections. 
Each  division  is  under  a  foreman,  who  is  held  responsible 
for  a  certain  number  of  steps  in  the  process  of  manufacture. 

The  production  order  is  an  instrument,  or  a  series  of  in- 
struments (see  Figs.  35  and  36),  made  out  by  the  central 
authority,  presenting  in  written  form  the  instructions  to  be 
followed  in  various  departments  of  a  plant  in  order  to  pro- 
duce a  given  commodity.  It  may  or  may  not  be  a  part  of  a 
voucher  or  budget  system.  The  production  order,  in  its 
strictest  sense,  only  tells  what  things  shall  be  done;  it  does 
not  necessarily  keep  track  of  material  used.  However,  wher- 
ever a  production  order  plan  is  used,  it  almost  always  com- 
bines with  it  some  kind  of  a  material  record,  and  whenever 
the  budget  system  is  put  into  operation,  it  invariably  uses 
some  form  of  the  production  order.  This  instrument  follows 
the  goods  through  all  the  departments  in  the  manufacturing 
process ;  and  as  they  pass  from  one  to  the  other,  the  order 
can  be  made  the  basis  for  keeping  record  of  the  work  as  it 
progresses  through  the  plant.  To  do  this,  one  need  only  re- 
quire each  manufacturing  division  to  notify  the  accounting 
office  of  the  number  of  production  orders  received  and  the 
amount  of  work  expended  on  each  order  during  the  day. 
This  can  be  done  in  connection  with  the  material  budget  and 
time-check  system,  and  in  fact  is  usually  a  part  of  the  time- 
record  scheme.^  In  this  way  the  officials  of  the  concern 
have  a  constant  exact  record  of  the  value  of  goods  in  the 
process  of  manufacture. 

The  simplest  type  of  plant  is  one  which  manufactures  a 
product  like  sugar  or  refined  oil.  The  product  comes  into 
the  plant  in  a  bulk  that  can  easily  be  measured,  and  is 

1  See  Chapter  XVI. 


284    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

passed  from  one  department  to  the  other,  either  by  pumps 
or  gravity.  The  quantities  can  be  definitely  measured,  al- 
most if  not  quite  automatically,  at  the  end  of  each  step  in  the 
process  by  simple  registering  devices  on  the  tanks,  convey- 
ing tubes,  or  receptacles.  Nothing  need  be  handled.  The 
only  attention  required  is  to  see  that  the  machinery  is  in 


Workman 

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Fig.  49.— Record  Slip  showing  Amount  of  Goods  which  passed 
through  a  Department  in  Bulk. 

condition.  Of  course,  there  may  be  wastes  in  the  chemistry 
of  the  process ;  but,  if  these  are  once  revealed  by  the  scientist, 
the  measuring  gauges  can  be  made  to  show  their  importance. 
In  such  a  plant,  the  task  resolves  itself  into  making  a 
permanent  record  of  the  product  of  each  department,  as 
shown  by  the  weighing  of  the  solids  and  the  readings  of  the 
registers  on  the  tanks,  stills,  boilers,  and  other  holders  of 
the  liquids,  and  the  length  of  time  each  amount  took  to  pass 


RECORD  OF  FINISHED  AND   UNFINISHED  GOODS    285 

through  every  particular  step  in  the  process.  If  these  slips 
(see  Fig.  49)  for  each  day's  work  are  sent  to  the  cost  clerk, 
he  can  add  the  direct  labor  cost  on  each  portion  of  the  prod- 
uct; and  can  apportion  the  percentage  that  the  said  depart- 
ment carries  of  the  managerial  expenses — rent,  taxes,  interest, 
depreciation,  repairs,  and  the  like,  and  thus  determine  unit 
costs.  Each  department  can  be  required  to  fill  out  forms 
like  Fig.  49,  and,  at  the  end  of  the  day,  send  them  to  the 
cost  clerk,  who  can  enter  them  on  a  cost  ledger  sheet,  ruled 
something  like  Fig.  50. 

In  a  plant  of  this  character,  where  nothing  is  sold  except 
from  general  stock,  it  is  desirable  to  know  what  has  been  the 
amount  of  waste  in  different  mixtures,  as  well  as  their  stage 
of  completion  within  the  plant.  The  former  can  be  deter- 
mined very  readily  by  making  note  of  the  total  amount  of 
the  various  ingredients  of  the  mixture,  and  noting  at  the  end 
of  the  process  the  total  amount  of  the  different  kinds  of  fin- 
ished products  obtained  from  this  mixture.  If  accurate 
ledger  record  is  kept  of  the  material  as  it  passes  from  one 
step  of  the  process  to  the  other,  one  can  tell,  by  merely  look- 
ing on  this  summary  page,  the  amount  that  has  been  received, 
the  amount  that  has  passed  through,  and  the  balance  on 
hand.  One  can  also  tell  the  extent  of  the  loss  that  has  been 
entailed  in  purifying  the  product  to  any  particular  degree. 
If,  at  any  time,  a  new  order  should  come  in  for  a  lot  of  ma- 
terial, or  if  a  cargo  of  new  raw  material  should  be  delivered, 
the  manager  of  the  plant  can  turn  to  the  ledger  sheets  and 
ascertain  just  what  is  the  condition  of  the  orders  under  way, 
and  how  soon  he  can  utilize  the  raw  material  awaiting  his 
disposal,  or  how  soon  he  can  deliver  any  unusual  orders. 
The  ledger  can  also  tell  him  whether  or  not  one  department 
is  smaller  in  capacity  than  it  should  be  to  bring  about  the 
best  results  for  the  firm.  In  fact,  the  ledger,  if  well  kept, 
affords  just  as  accurate  an  inventory  of  goods  in  process  of 
manufacture  as  of  the  raw  materials. 


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RECORD  OF  FINISHED  AND  UNFINISHED  GOODS    287 

In  the  manufacture  of  hats,  shoes,  furniture,  and  similar 
materials,  there  is  a  more  difl&eult  problem.  The  product 
cannot  be  measured  in  bulk,  and  the  time  taken  to  manufac- 
ture cannot  be  recorded  for  each  lot  in  a  group  way.  The 
commodities  are  made  up  of  pieces  which  must  be  handled 
as  units,  and  the  steps  in  fabrication  are  such  that  each 
product  must  be  acted  upon  separately  by  the  attendant  at 
each  machine. 

A  good  way  to  keep  account  of  products  of  this  type  is  to 
pass  them  through  the  factor)^  in  small  quantities.  Hat  fac- 
tories, shoe  establishments,  and  textile  mills  divide  their 
products  into  lots  which  may  include  pieces  of  so  many 
yards,  or  comprise  one,  two,  three,  or  more  dozens  units  or 
pairs.  A  production  order  is  written  out  for  each  lot  of 
goods,  and  two  methods  may  be  used  to  record  the  exact 
condition  of  the  lot  in  the  process. 

1.  The  production  order  may  be  arranged  in  the  form 
of  a  tag  having  detachable  slips.  (See  Fig.  35.)  As  each 
operator  finishes  his  step  in  the  process,  he  detaches  his  por- 
tion of  the  tag,  and  sends  it  to  the  accounting  department, 
where  all  tags  are  summarized  on  a  partly  finished  goods 
record  sheet  for  goods  which  pass  through  departments  in 
lots.  (See  Fig.  51.)  To  determine  what  is  in  each  depart- 
ment by  Fig.  51,  one  need  only  note  the  number  of  lota 
which  have  been  received,  but  which  have  not  been  passed 
on  to  another  machine  or  step.  If  one  of  the  departments 
has  received  a  great  number  of  lots  and  doe.i  not  seem  to  be 
delivering  them  as  rapidly  as  they  are  turned  in  to  them,  the 
management  can  at  once  search  out  the  reasons,  which  may 
be  lack  of  men,  insufficient  machinery,  or  may  need  more 
ability  on  the  part  of  the  foreman  to  get  the  work  out. 

2.  According  to  the  other  scheme,  a  tag  or  slip  is  made 
out  for  each  operation  (see  Fig.  36) ,  and  every  day  the  forC' 
man  of  each  division  makes  a  list  of  the  jobs  he  finishes  and 
then  gives  this  record  to  the  accounting  department.     In  tha 


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RECORD  OF  FINISHED  AND  UNFINISHED  GOODS    289 

accounting  department  these  totals  may  be  siimmarized  on  a 
sheet  like  Fig.  52.  This  sheet  gives  the  head  of  the  plant  a 
good  idea  of  what  is  going  on.  Some  firms  use  this  balance 
scheme  to  very  good  purpose.  A  certain  large  wagon  manu- 
facturer calls  together  all  of  his  foremen  every  day,  and  has 
them  list  on  a  big  blackboard  their  receipts  from  and  deliv- 
eries to  every  other  department,  with  their  balances  on  hand. 
If  any  foreman  is  short  of  goods  or  runs  below  his  standard 
amount  of  receipts,  he  records  his  deficiencies  in  red  chalk. 
If  his  receipts  and  balances  of  goods  are  unusually  large,  he 
records  them  in  blue  chalk.  The  result  is  that  each  foreman 
knows  what  every  one  else  is  doing;  and  the  manager  of  the 
\Aant  having  all  the  foremen  together,  can  discuss  with  them 
why  they  are  deficient.  If  anyone  is  to  blame,  the  difficulty 
tan  be  located  at  once,  and  remedied  with  remarkable  lack 
of  friction.  This  latter  scheme  of  handling  material  can  be 
used  very  effectively  in  assembling  processes. 

This  chapter  has  advocated  the  use  of  the  production 
order  form  of  tag  or  slip,  to  gather  the  time  of  each  contract 
on  the  summary  books.  (See  Figs.  35  and  36.)  While  this 
is  in  most  cases  the  best  scheme  to  employ  in  machine  shops 
and  similar  plants,  these  ledgers  can  be  used  in  connection 
with  other  kinds  of  time-slips  like  those  illustrated  in  Figs. 
31,  33,  and  34,  or  even  with  the  daily  contract  time-book 
(Fig.  29). 

The  work  of  gathering  the  material  on  the  ledger  sheet  is 
practically  the  same  in  each  case.  A  ledger  sheet  of  this 
character  shows  the  length  of  time  the  work  has  laeen  in  each 
stage  of  the  process,  and  gives  the  management  some  idea 
when  it  should  be  finished. 

The  general  question  of  cost  accounting  is  not  under  dis- 
cussion here,  but  if  records  are  kept  in  the  manner  indicated 
by  the  chapters  on  keeping  track  of  the  labor  and  keeping 
track  of  the  raw  material,  it  requires  little  or  no  added  ex- 
pense to  fill  in  the  column  shown  on  these  ledger  sheets  for 


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RECORD  OF  FINISHED  AND  UNFINISHED  GOODS    291 

determining  exact  labor  and  material  costs.  Indirect  ex- 
penses and  power  costs  will  have  to  be  apportioned  from  the 
general  books  to  the  plant's  output. 

To  keep  track  of  the  finished  product,  little  need  be  done. 
In  ordinary  enterprises  the  shipping  department  receives  all 
its  finished  goods  from  its  own  factory.  Some  businesses 
are  of  such  a  nature  that  the  product  is  shipped  as  soon  as  it 
is  completed;  but  where  stock  is  kept  on  hand,  the  keeping 
of  an  inventory  is  quite  as  important.  The  following  for- 
mula suggests  an  efficient  method  of  keeping  such  an  inven- 
tory: 

[Amounts  received  from  factory  (both  quantity  and 
value)  +  Balance  already  on  hand  (quantity  and  value)  + 
Returns  (quantity  and  value)]  —  [Sales  (quantity  and  value) 
+  Amounts  given  out,  but  not  sales,  as  gifts,  etc.  (quantity 
and  value)]  =  Inventory  on  hand  (quantity  and  value)  or 
(A  +  B  +  R)— (S  +  G)  =  L     (See  Fig.  53.) 

To  make  any  inventory  thoroughly  reliable,  an  adequate 
system  of  original  records  should  be  provided  in  addition  to 
a  proper  summary  record  in  the  ledger.  A  very  good  plan  is 
TX)  have  the  shipping  department  give  a  receipt  for  every  con- 
signment of  goods  received  from  the  factory.  The  receipt 
should  be  made  out  in  triplicate,  one  copy  being  retained  by 
the  foreman  of  the  factory,  one  by  the  shipping  department, 
and  the  third  sent  to  the  accounting  department,  to  be  used 
as  a  basis  for  the  ledger  entries,  and  to  be  filed  away  for 
reference. 

When  the  shipping  department  receives  goods  returned 
from  dissatisfied  customers,  or  from  any  other  source  than 
the  factory,  another  form  of  receipt  should  be  made  out  in 
triplicate,  one  to  be  sent  to  the  customer  or  source  from  which 
return  comes,  one  to  be  retained  by  the  shipping  department, 
and  one  to  be  sent  to  the  accounting  department. 

The  shipping  department  should  send  goods  out  only  on 
receipt  of  an  order  from  the  sales  department.    The  sales  or- 


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RECORD  OF  FINISHED  AND  UNFINISHED  GOODS     293 

ders  should  be  made  out  in  triplicate,  the  original  to  be  re- 
tained in  the  sales  department,  duplicate  and  triplicate  sent 
to  the  shipping  clerk.  The  shipping  clerk  will  fill  out  the 
order  so  far  as  possible,  checking  off  all  the  items  he  has 
been  able  to  deliver.  He  will  file  the  duplicate  for  his  own 
reference,  taking  care  to  notify  the  sales  department  of  any 
inability  to  fill  out  all  the  requirements  of  any  order,  and 
will  send  the  corrected  triplicate  to  the  accounting  depart- 
ment, where  it  will  be  used  as  an  original  record  for  the 
ledger  credits. 

Ledgers  of  this  character  can  be  used  for  every  kind  of 
work.  They  give  the  management  an  accurate  statement  of 
the  various  kinds  of  finished  product  on  hand  at  any  time, 
and  are  an  aid  in  determining  future  policies  in  manufac- 
ture. If  goods  are  not  being  sold  rapidly,  the  reasons  can  be 
investigated  to  ascertain  whether  slow  sales  are  due  to  laxity 
on  the  part  of  the  sales  department,  or  to  inferiority  in  man- 
ufacture. Ordinarily,  a  large  percentage  of  returns  indicates 
the  latter  cause,  and  a  careful  investigation  will  reveal  the 
true  cause  of  the  plant's  deficiency. 


CHAPTER  XIX 

RECORD   OF   EQUIPMENT 

The  equipment  of  a  plant  may  be  separated  into  four 
divisions : 

1.  Hand  tools  and  machine  attachments  used  by  the 
workmen  in  the  course  of  their  work  throughout  the  day. 

2.  Patterns,  templets,  and  other  forms  used  for  special 
classes  of  work  or  for  special  occasions. 

3.  Drawings,  records,  and  plans. 

4.  The  power  machinery  which  makes  goods  under  the 
direction  of  the  workmen. 

In  keeping  track  of  each  of  these  four  classes  of  material, 
a  different  principle  is  involved.  The  tools  of  the  first  class 
are  used  constantly,  and  to  keep  track  of  them,  they  must  be 
put  in  a  place  convenient  for  the  workmen.  The  tools  should 
be  so  arranged  in  the  tool-room  that  anyone  can  find  them  at 
once,  even  if  he  is  a  comparative  stranger  to  the  room,  and 
the  system  of  accounting  for  stock  must  enable  the  store- 
keeper at  any  time  to  tell  who  has  a  tool  out. 

As  has  already  been  stated,  the  best  situation  for  the  tool- 
room is  near  the  center  of  the  shop.  If,  however,  there  is 
any  great  difference  in  the  rate  of  wages  paid  to  the  men,  it 
will  be  cheaper  to  place  the  tool-room  nearer  to  the  machines 
at  the  section  of  the  shop  where  the  most  skilful  and  expen- 
sive labor  is  situated.  Frequently,  however,  the  highly  paid 
workers  have  one  or  more  helpers,  so  our  rule  will  again  have 
to  be  modified.  It  is  the  workmen  who  have  no  helpers,  and 
yet  are  highly  paid  that  should  be  nearest  the  tool-room. 

1.  To  keep  track  of  the  tools  within  a  tool-room  in  such 
a  way  that  anyone  can  find  them  is  not  so  difficult  a  task  aa 

294 


RECORD   OF   EQUIPMENT  295 

it  might  seem.  In  a  plant  like  a  textile  establishment  which 
has  really  little  if  any  need  for  hand  tools,  the  tool-room  is 
small  and  unimportant,  and  almost  any  system  suffices  that 
makes  it  possible  to  know  who  have  possession  of  the  tools ; 
but  in  a  machine  shop  where  there  are  a  great  many  small 
tools  and  attachments  for  machines,  hammers,  chisels,  drills, 
wrenches,  taps,  dies,  gauges,  and  a  hundred  other  different 
kinds  of  instruments  constantly  in  greater  or  less  demand,  a 
convenient  system  must  not  depend  upon  the  memory  of  any 
one  or  of  several  individuals. 

Two  systems  are  in  general  use  to  keep  track  of  materials 
in  machine  shops : 

(a)  The  tools  may  be  arranged  in  classes  and  groups.  By 
this  scheme,  all  cutting  tools  are  kept  together  in  the  cutting 
class,  the  machine  cutters  being  put  in  a  group  by  them- 
selves, while  the  hand-cutting  tools  are  grouped  separately. 
Within  these  groups  the  tools  are  arranged  according  to  their 
use.  If  they  bore  holes,  they  go  under  boring  cutters;  if 
they  cut  grooves  or  fiat  surfaces,  they  are  plane-cutters. 
They  are  also  arranged  in  order  of  sizes.  One  firm  carries 
out  this  scheme  to  a  very  elaborate  extent. 

The  tools  in  the  tool-room  should  be  kept  in  good  condi- 
tion by  the  tool-shop.  The  workmen  should  be  relieved  of 
the  necessity  of  grinding  or  caring  for  them.  There  should 
always  be  a  large  supply  of  the  more  commonly  used  tools, 
and  at  no  time  should  a  workman  fail  to  obtain  a  tool  when 
wanted.  There  should  be  no  red  tape  necessary  to  get  a  tool. 
The  workman  should  be  held  responsible  for  a  tool  after  he 
has  received  it,  but  should  not  be  put  to  any  unnecessary 
trouble  to  get  it. 

According  to  the  plan  outlined,  accuracy  in  record  and 
availability  for  use  can  be  achieved  by  stamping  on  the  tools 
their  proper  letters,  so  that  one,  even  a  stranger,  need  only 
look  for  the  drawer  or  compartment  bearing  the  same  letters ^ 
in  order  to  put  them  away  in  their  proper  place. 


296    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

(b)  The  other  scheme  is  to  classify  tools  by  numbers  in- 
stead of  by  letters  or  any 'mnemonic  sign.  According  to  this 
plan,  every  tool  is  indexed,  and  a  person  desiring  a  particu- 
lar one,  turns  to  the  index,  finds  its  number,  and  goes  to  the 
corresponding  case  or  drawer.  There  is  little  difference  in 
the  principles  of  the  two  schemes.  Both  permit  the  tools 
most  generally  used  to  be  stored  in  convenient  j^laces,  and 
they  also  keep  all  tools  of  the  same  class  together. 

Quite  as  important  as  being  able  to  find  the  tools  in  the 
tool-room  is  the  ability  to  tell  where  the  tool  is  in  the  shop. 
Many  tools  are  used  intermittently,  and  numerous  duplicates 
are  unnecessary.  Large  wrenches  are  required  on  big  jobs, 
but  even  the  largest  shops  do  not  need  to  have  many  dupli- 
cates, provided  the  tool-room  clerk  is  able  to  tell  where  a  tool 
is  at  any  time.  A  good  device  is  to  give  the  workman  a  set 
of  brass  checks  stamped  with  his  number,  so  that  the  tool 
clerk  may  put  a  check  in  place  of  the  tool  which  the  work- 
man has  secured.  This  check  acts  as  a  receipt  for  the  tool, 
and  is  not  to  be  returned  to  the  workman  unless  he  delivers 
the  tool  to  the  clerk.  If  a  workman  calls  for  a  tool  not  on 
hand,  the  tool  clerk  can  promptly  tell  who  in  the  shop  has 
it.  The  workman  may  then  borrow  the  tool,  or  leave  his 
check  with  the  toolkeeper,  get  the  other  man's  check  and 
exchange  it  for  the  tool.  The  second  workman  might  also  go 
directly  to  the  first  man  and  exchange  a  check  for  the  tool. 
The  next  time  the  first  workman  goes  to  the  tool-room  he  can 
exchange  this  check  for  his  own. 

By  this  simple  scheme  shops  can  keep  track  of  all  tools 
while  out  of  the  tool-room.  With  the  check  system,  work- 
men can  be  made  to  deliver  all  borrowed  tools  before  they 
permanently  leave  the  plant,  because  they  can  be  compelled 
to  return  a  full  complement  of  checks  before  they  will  be 
given  a  clearance  paper  from  the  tool-room. 

The  system  indicates  who  has  any  particular  tool  out  at 
9jiy  time,  but  it  does  not  show  how  many  tools  any  particular: 


RECORD  OF  EQUIPMENT  297 

workman  has.  If  it  is  desirable  to  keep  track  of  this,  the 
tool  clerk  can  have  a  list  of  the  workmen's  numbers,  and 
enter  therein  the  numbers  of  the  tools  each  workman  takes 
out.  There  are  so  few  advantages,  however,  in  having  this 
information  that  it  is  seldom,  if  ever,  recorded.  In  some 
cases  expensive  or  special  tools,  as  a  diamond-cutter,  may 
require  a  special  receipt  from  the  workman,  but  otherwise 
the  tool-room  clerk  can  keep  sufficiently  close  watch  on  the 
tools  a  man  has  out  by  keeping  record  of  the  checks  a  work- 
man has  lost,  and  by  noting  his  calls  for  any  tools  which 
would  be  unusual  for  his  particular  work  in  the  shop.  If 
the  man  is  about  to  leave  and  has  lost  checks,  the  clerk  need 
merely  refer  to  his  memorandum,  and  insist  that  all  other 
checks  be  accounted  for  by  tools.  This  may  seem  a  free  and 
easy  method  for  one  to  keep  track  of  thousands  of  tools  and 
hundreds  of  workmen;  but,  as  a  matter  of  fact,  the  fine  that 
is  attached  to  the  loss  of  checks  makes  it  unprofitable  for  a 
man  to  take  tools  which  are  not  extremely  valuable  in  their 
nature,  and  in  those  cases  the  special  receipt  is  ample  pro- 
tection. 

Besides  keeping  the  tools  convenient  to  the  men  and 
keeping  track  of  them  in  the  tool-room  and  in  the  shop,  the 
tool  department  should  be  able  to  report  to  the  management 
the  kinds  and  makes  of  the  most  serviceable  and  profitable 
tools.  A  convenient  and  reliable  scheme  is  to  have  stamped 
on  the  shank  of  the  tool,  or  in  some  inconspicuous  part,  the 
date  of  its  purchase  and  the  cost  mark;  and,  if  it  is  not 
already  there,  the  name  of  the  firm  which  made  it.  If  this 
plan  is  followed  and  care  is  taken  to  issue  the  tools  under 
comparison,  an  equal  number  of  times,  the  management  can 
soon  tell  which  makes  are  proving  the  most  efficient  and 
economical.  It  can  also  determine  from  this  record  what  is 
stiU  more  important :  the  actual  expenses  connected  with  the 
tool  department  and  what  classes  of  work  are  the  most  ex- 
pensive users  of  tools. 


298    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

2.  The  second  class  of  equipment — patterns,  jigs,  tem- 
plets, and  other  forms  and  guides  for  the  workmen — are  not 
important  in  many  lines  of  manufacturing.  In  many  others, 
however,  they  are  used  almost  continuously.  In  some  classes 
of  production  the  forms  or  patterns  must  be  renewed  every 
year  or  so,  not  because  they  are  worn  out,  nor  because  the 
firm  ceases  to  manufacture  goods  of  a  similar  grade,  but 
simply  because  the  whim  of  fashion  has  called  for  something 
else  a  little  different  in  shape  or  form.  In  the  shoe  industry 
the  question  of  lasts  is  troublesome.  Some  factories  sell 
their  lasts  to  concerns  that  manufacture  a  cheaper  or  lower 
grade  of  shoe,  and  hence  do  not  cater  to  the  more  fastidious 
public.  Even  when  lasts  are  sold,  they  are  sold  at  a  loss  to 
the  concern.  Eventually  every  shoe  manufacturer  must  sacri- 
fice a  great  deal  of  money  yearly  through  the  discontinuance 
of  certain  styles  and  the  introduction  of  others.  Great  as 
this  loss  is  in  total  amount,  it  does  not  put  a  heavy  burden 
on  any  one  pair  of  shoes,  because  a  concern  manufactures 
thousands  of  pairs  in  a  year,  and  the  money  expended  upon 
the  lasts  is  distributed  through  so  many  pairs  of  shoes,  that 
it  adds  but  little  to  the  cost  price  of  the  shoe. 

Other  industries  find  patterns  and  forms  just  as  essential 
as  does  the  shoe  industry.  An  engine  cannot  be  built  with- 
out using  many  expensive  patterns  and  forms  of  various 
kinds,  and  general  machine  shops  rapidly  accumulate  a 
large  number  of  patterns.  The  drawing-room  receives  the 
specifications  for  all  contracts,  and  it  can  make  possible 
heavy  savings  in  using  old  forms  and  patterns  if  they  hap- 
pen to  know  of  previous  jobs  whose  patterns  can  be  adapted 
to  the  new  undertaking. 

It  is  important  for  the  drawing-room  to  know  just  what 
patterns  it  has  at  any  particular  time.  Few  engines  made 
at  different  times  are  exactly  alike,  yet  every  new  engine 
must  have  a  complete  set  of  patterns,  which  will  in  all  prob- 
ability never  be  duplicated.     The  patterns  may  represent 


RECORD   OF   EQUIPMENT  299 

several  thousands  of  dollars  in  labor  and  materials,  and  be 
useful  for  only  one  contract.  It  is  not  to  be  assumed  that 
these  patterns  represent  a  dead  loss,  for,  although  they  may 
never  be  used  again  as  they  stand,  they  can  frequently  be 
utilized  for  other  orders  by  making  alterations.  Because 
they  may  be  adapted  to  other  work,  manufacturing  firms  al- 
ways keep  patterns,  whether  the  work  is  likely  to  be  dupli- 
cated or  not.  If  a  plant  has  been  in  operation  for  some  time, 
these  patterns  may  accumulate  to  embarrassing  proportions, 
and  unless  there  is  some  system  of  registration  for  them  and 
the  drawings  which  they  represent,  duplications  and  partial 
duplications  of  these  forms  will  constantly  occur  and  occasion 
large  losses.  Companies  early  began  to  develop  plans  for 
cataloguing  drawings  and  patterns. 

3.  One  scheme  was  to  classify  the  drawings  by  the  num- 
ber of  the  contract,  and  to  list  the  name  of  each  by  the  part 
of  the  engine  it  represented.  Thus,  a  drawing  of  a  high- 
pressure  cylinder  of  the  121st  contract  would  be  entitled 
"high-pressure  cylinder,"  and  in  some  less  prominent  place 
on  the  sheet  would  be  printed  "Contract  No.  121."  The 
patterns  would  be  numbered  in  a  corresponding  manner. 
The  system  is  faulty,  because  the  contract  number  gives  no 
intimation  as  to  the  kind  of  job  represented.  Should  it 
happen  that  the  shop  turns  out  water  turbines,  steam  pumps, 
hoisting  engines,  blowing  engines,  and  marine  engines,  Con- 
tract No.  121  might  be  anyone;  and  since  patterns  and  draw- 
ings were  filed  and  stored  in  order  of  the  number,  the  disad- 
vantages were  many,  but  the  system  had  in  it  suggestions 
for  a  better  one. 

Few,  if  any,  contracts  go  through  a  drawing-room  with- 
out the  chief  engineer  and  the  draftsmen  knowing  for  whom 
they  are  intended.  Involuntarily  the  number  of  the  contract 
becomes  associated  with  the  purchasing  firm;  and  the  said 
firm  is,  in  nine  cases  out  of  ten,  engaged  in  a  particular  busi- 
ness.    If  the  company  orders  a  blowing  engine,  it  is  in  the 


300    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

iron  business,  and  not  likely  to  call  for  marine  engines. 
The  contract  numbers  become  attached  to  the  firm's  work, 
and  the  firms  become  associated  with  certain  classes  of  ma- 
chinery. To  the  men  in  the  drawing-room,  a  new  order  for  a 
blowing  engine  calls  to  mind  tlie  firms  which  have  ordered 
similar  engines  in  the  past,  and  they  recall  the  contract 
numbers  which  have  been  attached  to  those  firms.  This  co- 
incidence gave  rise  to  another  system  of  tabulating  drawings 
and  patterns,  viz. : 

To  classify  alphabetically  according  to  the  names  of  the 
firms  who  order.  This  system  is  superior  to  the  previous 
one  in  that  it  simplifies  the  search  for  drawings  of  machinery 
of  a  similar  type,  and  reduces  the  probability  of  drawings 
being  overlooked.  To  the  older  men  in  the  office  a  firm's 
name  suggests  the  kind  of  machinery  it  is  in  the  habit  of 
securing,  and  they  involuntarily  start  to  hunt  them  up  when 
machinery  of  that  type  is  reordered.  Although  in  a  mod- 
erate-sized plant  the  system  is  quite  satisfactoiy,  in  a  very- 
large  one  it  fails  because  new  men  are  constantly  coming  in 
who  do  not  know  all  the  ordering  firms,  nor  remember  their 
characteristics.  Besides,  ordering  firms  at  times  radically 
change  their  work  and  call  for  other  things,  so  that  impor- 
tant drawings  may  be  forgotten,  especially  if  there  has  been 
any  change  in  the  administration  of  the  engine-building 
company.  The  system  tends  to  fail  because  men  are  com- 
pelled to  remember  too  many  names,  and  too  much  about 
past  orders. 

An  effective  system  is  to  classify  the  machinery  into 
groups,  and  give  each  group  a  distinctive  number.  Engines 
of  the  reciprocating  marine  type  might  all  come  under  600, 
if  simple  engines  their  number  will  be  510,  if  compound  520, 
triple  expansion  530,  and  so  on.  Should  the  steam  expan- 
sion of  the  simple  engine  occur  in  two  cylinders,  its  number 
would  be  512;  by  letting  the  units  represent  the  number  of 
cylinders,  a  triple  expansion  engine  with  five  cylinders  would 


RECORD  OP  EQUIPMENT  301 

be  585.  The  arrangement  of  the  cylinders  over  each  other 
determines  the  number  of  connecting-rods,  piston-rods, 
cranks,  housings,  and  th©  like,  which  the  engine  will  require. 
Frequently  a  five-cylinder  engine  will  have  four  of  the  cylin- 
ders arranged  in  pairs  tandem,  while  the  fifth  will  be  single. 
An  engine  of  that  character  will  have  three  connecting-rods, 
three  cranks,  three  sets  of  housings  or  their  equivalent,  three 
sets  of  eccentric  rods ;  in  brief,  the  engine  will  be  built  on  a 
triple  basis  throughout.  These  kinds  of  arrangements  could 
readily  be  indicated  by  the  addition  of  decimals.  Thus,  if  a 
quadruple  expansion  marine  engine  had  six  cylinders  ar- 
ranged— two  tandem,  two  single,  two  tandem — it  could  be 
expressed  546.2112.  Should  there  be  any  other  characteris- 
tics that  were  desired  to  be  shown,  it  could  be  done  by  the 
insertion  of  letters,  or  some  other  simple  device.  Thus, 
suppose  the  above  quadruple  expansion  engine  had  surface 
condensers,  they  could  be  indicated  by  a  letter  "S"  substi- 
tuted for  the  decimal,  thus  546S2112.  A  jet  condenser  would 
be  shown  by  the  substitution  of  a  letter  "J"  instead  of  the 
letter  "S." 

A  system  of  classification  based  upon  this  general  outline 
possesses  the  advantage  of  giving  easy  accessibility  to  all 
kinds  of  machinery  of  any  class  made  at  any  time.  In  ad- 
dition to  its  application  in  the  drawing-room,  it  can  be  used 
in  the  pattern  storage  houses. 

A  convenient  scheme  for  the  arrangement  of  the  patterns 
is  to  ajDply  the  drawing-room  classification  to  the  placement 
of  the  patterns  in  the  storage  shed.  The  drawings  above 
have  been  numbered  according  to  a  certain  grouping  system, 
which  gives  characteristic  numbers  to  each  class  of  engines 
or  machinery  manufactured,  so  that  one  can  tell  at  once  by 
the  number  what  an  engine  is  like,  and  much  about  it.  If 
we  divide  up  the  pattern  storage  room  on  a  basis  of  that 
classification,  all  the  patterns  for  the  engines  and  engine 
parts  would  be  readily  accessible.    All  engines,  although  they 


S02    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

may  differ  widely  in  their  design,  structure,  and  size,  have 
certain  parts  which  are  in  the  main  common,  as  cylinders, 
steam  chests,  engine  frames,  bed  plates,  shafts,  fly-wheels. 
The  patterns  may  be  grouped  either  by  contracts  as  a  whole, 
or  by  like  parts  of  different  contracts. 

The  first  scheme  has  the  disadvantage  that  patterns  of 
small  and  large  parts  and  of  dissimilar  pieces  are  likely  to 


3vn<bd 

PATTERN  CARD 

Name  ef  (Wtcro 
p«serii*ion 

PoHern  rmrh  of                                                                       Dote  Compl«1Bd 

Onqtnoll/  mode                             1 

forOrder                                           I  3for«d  Pn  BwiW.on                      floor                    Shelf                     3ec+iOn 

axctth  of 
Rattern 

1 

i 

Ho.  of  Core  bo<C3  Kim-thi*  ftrtttm                           /'     '' 

) 

NOTE 


Fig.  54.— Pattern  Record  Card.     (Front.) 


be  piled  together  at  the  expense  of  good  order  and  of  storage 
space.  If  all  the  similar  parts  of  the  various  machines  are 
grouped  together,  it  is  easier  to  find  the  same  kinds  of 
pieces;  and  if  the  system  of  arrangement  is  made  to  corre- 
spond to  the  drawing  numbers,  the  particular  patterns  can 
easily  be  located. 

In  addition  to  having  the  patterns  accessible,  it  is  highly 
desirable  that  the  drawing-room  should  know  the  exact  con- 


RECORD  OF  EQUIPMENT  303 

difcioh  of  each  pattern,  and  where  it  is  at  any  time.  Thia 
can  be  accomplished  by  having  filed  in  the  drawing-room 
cards  which  give  the  nmnber  and  complete  history  of  each 
pattern,  showing  all  alterations.  Copies  of  the  card  may  be 
kept  on  file  in  the  office  of  the  pattern  storage  rooms.  When 
the  pattern  is  taken  from  storage,  its  card  may  be  removed 
from  the  usual  filing  drawer  to  another  one,  so  that  all  the 
patterns  in  the  storage  shed  may  be  in  one  compartment, 
while  those  in  the  foundry  or  pattern  shop  may  be  in  another. 
(See  Fig.  54.) 

If,  in  addition  to  the  scheme  of  segregating  the  pattern 
cards,  to  show  those  out  of  storage  the  plan  to  be  adopted  of 
requiring  everyone  who  secures  a  pattern  to  leave  a  receipt 
countersigned  by  the  foreman  of  the  department  to  which  it 
goes,  and  of  filing  that  receipt  with  the  pattern  card,  it  be- 
comes a  very  simple  matter,  indeed,  to  trace  the  pattern  at 
any  time.  If  any  alterations  have  been  made  on  the  pattern, 
the  nature  of  these  changes  may  be  entered  on  the  back  of 
the  card,  so  that  one  will  have  a  complete  record  of  the  pat- 
tern from  the  time  it  was  first  constructed  until  it  is  de- 
stroyed. 

The  principles  outlined  for  keeping  track  of  patterns  may 
be  carried  out  for  keeping  track  of  any  other  kind  of  ma- 
terial. Some  concerns  have  adopted  a  filing  scheme  based  on 
the  Dewey  Decimal  system  for  their  technical  literature. 
The  Engineering  Experiment  Station  of  the  University  of 
Illinois  has  published  several  pamphlets  showing  how  the 
Dewey  Decimal  System  of  classification  may  be  applied  to 
Engineering  and  Architectural  work.^ 

According  to  the  Dewey  system,  aU  knowledge  is  sepa- 

^  Bulletins,  Nos.  9  and  13,  University  of  Illinois  Engineeringr 
Experiment  Station,  "An  Extension  of  the  Dewey  Decimal  System 
of  Classification  Applied  to  Engineering  Industries,"  and  "An 
Extension  of  the  Dewey  Decimal  System  of  Classification  Applied 
to  Architecture  and  Building."  ,  ,  ..,■ 

81 


804    THE  PRINCIPLES  OP  INDUSTRIAL  MANAGEMENT 

rated  into  ten  classes,  and  each  class  is  given  one  of  the 
hundreds  for  a  number,  viz. : 

000,  General,  including  Astrology,  Palmistry,  and  Works  of  a 
similar  character. 
100,  Philosophy. 
200,  Religion. 

300,  Sociology  and  Economics,  the  Social  Sciences. 
400,  Philology. 
500,  Natural  Science. 
600,  Useful  Arts. 
700,  Fine  Arts. 
800,  Literature. 
900,  History. 

Each  of  these  classes  is  broken  into  nine  divisions  with  a 
tenth  division  for  general  matter  in  the  class,  and  each  divi- 
sion is  in  turn  separated  into  nine  sections.  The  sections 
are  again  subdivided,  and  the  process  may  be  carried  on 
indefinitely. 

"To  show  clearly  the  working  of  the  system  the  divisions  of 
Class  6  (useful  arts)  and  the  sections  of  Division  2  of  this  class 
(engineering)  are  given. 


600, 

Useful  Arts. 

620, 

Engineering. 

610, 

Medicine. 

621, 

Mechanical. 

620, 

Engineering. 

622, 

Mining. 

630, 

Agriculture. 

623, 

Military. 

640, 

Domestic  Economy. 

624, 

Bridge  and  Roof. 

650, 

Communication   and 

625, 

Road  and  Railroad. 

Commerce. 

626, 

Canal. 

660, 

Chemical  Technology. 

627, 

River  and  Harbor. 

670, 

Manufactures. 

628, 

Sanitary :  Water  Works 

680, 

Mechanic  Trades. 

629, 

Other  Branches. 

690, 

Building. 

"It  will  be  seen  that  the  first  digit  gives  the  class ;  the  second* 
the  division ;  and  the  third,  the  section.  Thus  625  indicates  Sec- 
tion 5  (railroad  engineering)  of  Division  2  (engineering)  of  Class  6 
(useful  arts).  For  convenience  a  decimal  point  is  inserted  after 
the  section  digit.  Further  subdivision  is  indicated  by  digits  fdl- 
lowing  the  decimal  point.    For  example^  625.2  is  the  number  indi* 


RECORD  OF  EQUIPMENT  305 

eating  rolling  stock;  625.23  passenger  cars;  625.24  freight  cars, 
etc. 

"Uses  and  Advantages  of  the  Classification  and  Index. — The 
decimal  classification  may  be  used  to  advantage  in  the  indexing 
and  filing  of  notes  and  memoranda,  clippings,  general  information, 
articles  in  technical  journals,  drawings,  catalogues,  or  books.  For 
this  purpose  the  decimal  system  possesses  certain  important  ad- 
vantages over  the  alphabetical  system. 

"(1)  It  groups  allied  subjects.  For  example,  suppose  the  alpha- 
betical arrangement  to  be  applied  to  a  case  of  catalogues.  The 
catalogues  of  the  various  machine  tools,  as  planers,  lathes,  drills, 
hammers,  etc.,  would  be  scattered  throughout  the  case.  With  the 
decimal  system,  on  the  other  hand,  all  these  catalogues  would  be 
grouped  together  under  the  class  number  621.9. 

"(2)  Unless  an  elaborate  system  of  cross  reference  is  used,  the 
alphabetical  scheme  is  ambiguous  ;  in  many  cases  there  is  doubt  as 
to  what  letter  should  be  given  a  subject.  For  example,  take  the 
item  "Automatic  pneumatic  block  signals."  This  might  almost 
equally  well  be  indexed  under  A,  P,  B  or  S.  With  the  decimal 
system  this  item  has  its  one  number  656.256.4. 

"(3)  The  decimal  system  has  the  advantage  of  flexibility  and 
an  indefinite  capacity  for  extension.  For  the  indexing  of  books 
and  catalogues  only  the  main  division  and  sections  will,  in  general, 
be  found  necessary ;  but  for  card  indexes  of  technical  literature 
the  most  minute  subdivisions  must  ordinarily  be  used.  In  indi- 
vidual cases,  the  user  may  find  that  still  further  division  is  re- 
quired. An  extension  may  then  be  made  by  adding  another  decimal 
place,  and  if  still  further  subdivision  is  required  still  another  digit 
may  be  used. 

"The  average  engineer,  for  example,  can  easily  index  all  matter 
relating  to  traveling  cranes  under  the  single  class  number  621.872. 
The  designer  or  builder  of  cranes  may,  however,  have  so  much 
matter  relating  to  this  special  subject  that  further  subdivision  is 
needed.  By  the  addition  of  a  digit,  this  matter  may  be  divided 
into  nine  groups,  designated  by  621.872.1,  621.872.2,  etc. ;  and,  if 
necessary,  each  of  these  maybe  divided  into  nine  new  groups.  "> 

While  this  system  works  well  for  the  filing  of  books,  clip- 
pings, and  drawings,  it  has  its  limitations  when  used  to  ar- 

^  Bulletin,  No.  9,  University  of  Illinois,  Engineering  Experi- 
ment Station,  pp.  2  to  4.  ^ 


366    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

range  contracts  and  patterns.  Manufacturing  firms,  as  a 
rule,  have  specialized  their  work  to  such  an  extent  that  it  is 
unnecessary  for  them  to  have  any  general  class  number  like 
621,  to  let  them  know  their  contract  deals  with  mechanical 
or  electrical  engineering  machinery.  For  locating  patterns, 
such  numbers  are  not  only  unnecessary  in  the  average  shop, 
but  are  confusing;  hence,  while  the  Dewey  system  of  classi- 
fication is  excellent  for  filing  all  information  which  the  firm 
may  gather  from  outside  sources,  a  simple  modification  like 
the  one  above  suggested,  may  be  used  to  advantage  in  cata- 
loguing patterns  and  contracts. 

4.  In  order  to  keep  a  sufficient  record  of  machines,  the 
management  should  know  the  following: 

(a)  Are  the  machines  running  to  their  full  capacity  all 
the  time  the  workmen  are  attending  to  them? 

(b)  Are  there  sufficient  machines  to  do  the  class  of  work 
required  by  the  shop? 

(c)  What  is  the  up-keep  cost  of  the  machines  in  repairs, 
lost  time,  etc.,  and  the  reasons  for  these  expenses? 

(d)  What  is  the  rated  and  real  capacity  of  the  machines? 
When  a  company  purchases  a  machine,  the  salesman  is 

quite  apt  to  make  extravagant  statements  concerning  the  per- 
formance of  the  device,  and  the  apparatus  often  proves  to  be 
far  less  efficient  than  one  would  conclude  from  the  salesman's 
representation.  Manufacturers  have  frequently  been  inclined 
to  discredit  salesmen's  promises  fifty  to  one  hundred  per 
cent.  In  many  instances  such  action  is  unfair  to  the  sales- 
man and  to  themselves,  because  they  may  not  have  gotten 
the  possibilities  from  the  machine,'and  may  blame  the  sales- 
man for  misrepresentation  while  their  own  workmen  are  at 
fault.  The  lack  of  output  may  be  due  to  prejudice  against 
the  device  on  the  part  of  the  workmen,  who,  to  prevent 
changes  in  wage  rates,  will  not  make  the  machine  produce 
to  its  utmost.  Sometimes  they  feel  that  the  output  from 
previous  machines  is  sufficient,  and  that  the  new  machine  is 


RECORD   OF  EQUIPMENT 


307 


to  be  considered  a  labor-saver,  in  the  sense  that  it  will  save 
them  from  exerting  themselves,  as  formerly,  in  order  to  make 
the  old  standard  output.  The  old  way  of  managing  a  shop 
compelled  the  foreman  to  be  alert  to  prevent  machine  hands 
from  soldiering.     If  the  boss  is  familiar  with  all  the  ma- 


By  courtesy  of  The  Bristol  Company,  Waterbury,  Conn. 

Fig.  55. — Record  Card  of  a  Bristol  Automatic  Time  Re- 
corder Applied  to  Two  Paper  Machines,  Showing  All 
Idle  Time  in  Twenty-four  Hours. 

chines  in  operation,  he  can  prevent  idleness  to  a  very  great 
extent;  but  it  is  possible  to  loaf  on  machine  work,  even  with 
the  best  and  most  knowing  overseers.  A  number  of  ingeni- 
ous devices  have  been  j)ut  on  the  market  to  eliminate  depen^ 
dence  upon  the  foreman's  knowledge.  These  automatic- 
recording  devices  keep  track  of  the  power  used  per  hour,  of 
temi^eratures,  and  of  pressures  at  all  times.  In  fact,  one  can 
have  almost  anything  recorded.    ^V^ith  them  one  can  tell  from 


308    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

the  power  and  time  records  whether  the  machine  is  using  up 
all  the  power  demanded  by  its  maximum  capacity,  and  what 
is  the  extent  of  its  idle  time  during  any  period. 

The  following  figures  and  illustrations  give  an  idea  of  the 
application  of  recording  instruments  to  industrial  conditions. 
Fig.  55  shows  an  application  of  it  to  two  paper  machines. 
Every  time  either  of  the  machines  stopped,  the  recording  pen 
for  the  machine  dropped  toward  the  periphery  of  the  card, 
and  the  duration  of  the  idleness  is  shown  by  the  length  of 
the  notch.  Figs.  56  and  57  show  the  temperature  records, 
"the  chart  No.  661,  of  December  15,  1908,  was  drawn 
shortly  after  the  installation  of  this  thermometer  on  our 
feed-water  system.  That  of  April  13,  1909,  is  from  the  same 
instrument.  A  comparison  of  these  two  will  give  you  an 
idea  of  the  improvement  it  is  possible  to  affect  in  feed- water 
temperature,  with  the  aid  of  a  sensitive,  accurate  recorder."^ 

One  great  advantage  of  all  these  recording  instruments  is 
that  no  matter  where  the  operations  are  carried  on,  the  re- 
cording apparatus  can  be  concentrated  at  any  point.  In  this 
way  it  is  possible  to  have  all  the  records  in  the  office  of  the 
foreman  or  superintendents  while  they  are  being  made. 
Many  plants,  however,  do  not  have  the  instruments  so  placed, 
because  if  they  are  going  to  get  the  greatest  efficiency  out  of 
their  men,  it  is  well  to  let  the  workers  see  just  what  kind 
of  a  record  they  are  making  while  on  duty.  The  foremen 
should  be  around  to  see  the  men  from  time  to  time,  so  there 
is  no  great  advantage  gained  by  having  the  gauges  gathered 
together  in  his  office,  or  that  of  some  superior  official.  The 
superintendent  of  a  large  plant  has  other  duties  than  watch- 
ing gauges  in  operation.  His  clerk  should  gather  the  records 
and  call  his  notice  to  any  bad  reports  or  unusual  showings 
which  need  attention.  He  will  thus  know  what  to  investi- 
gate,  and  should  not  be  troubled  with   the  records  when 


1  Bulletin,  No.  Ill,  The  Bristol  Company,  September,  1909. 


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810    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

everything  is  going  as  well  as  present  methods  make  possi- 
ble. His  time  under  those  conditions  can  be  better  em- 
ployed in  improving  the  methods  in  operation. 

If  the  records  kept  show  that  machines  are  always  run- 
ning at  their  full  capacity,  it  is  fair  to  expect  them  to  make 
their  promised  output.  Not  only  is  it  necessary  to  see  that 
machines  are  making  their  promised  outputs,  but  care  should 
be  taken  to  see  that  they  make  it  consistently  throughout 
long  lapses  of  time.  Many  firms  keep  daily  records  of  ma- 
chine outputs  in  such  a  way  that  a  person  can  tell  at  a  glance 
how  the  department  is  running.  These  records  are  frequently 
used  in  connection  with  other  data.  Mr.  H.  L.  Gantt  in 
1903  published  a  paper,  entitled  "A  Graphical  Daily  Bal- 
ance in  Manufacture, ' '  to  show  how  a  daily  balance  scheme 
can  be  used  to  facilitate  getting  work  turned  out  by  a  de- 
partment. The  advantages  of  his  daily  balance  scheme,  as 
he  presented  it,  are  that  it  aids  the  foreman  by  showing  him 
at  a  glance  what  is  to  be  done,  and  what  he  has  already^done 
on  any  particular  lot.  In  order  to  show  this  he  present^s 
some  tables  indicating  his  balance  sheet  scheme,  which  are 
here  reproduced.     (See  Fig.  58. ) 

One  will  observe  that  this  is  merely  a  plan  for  keeping 
track  of  unfinished  material,  not  unlike  some  previously 
described,  but  the  scheme  can  be  used  to  determine  whether 
the  plant  is  over  or  under  supplied  with  any  kind  of  ma- 
chines. Indeed,  Mr.  Gantt,  in  his  note  at  the  bottom  of  the 
right  of  Fig.  58,  calls  attention  to  the  fact  that  it  can  be  so 
used:  "This  table  shows  the  way  F^g.  58  would  look  if  the 
works  were  short  of  frame-drilling  capacity."  Any  one  of 
the  schemes  used  to  keep  track  of  partly  finished  goods  would 
likewise  show  any  deficiencies  in  machine  equipment,  pro- 
vided the  foreman  could  prove  it  was  not  due  to  lack  of  labor 
or  to  his  own  insufficiency. 

After  a  firm  is  satisfied  that  its  machinery  is  working  to 
its  full  promised  capacity,  and  has  demonstrated  that  it  has 


RECORD   OF    EQUIPMENT 


311 


sufficient  machinery  on  hand  to  do  the  work  required,  the 
next  question,  and  an  exceedingly  important  one,  is  to  de-» 
termine  which  machines  are  really  the  most  economical  to 


N.  L.  CANTT 
Ordar  No.  77 
1  6  Enginn,  N.  V.  C. 


A.  L.  CO.  PRODUCTION  SHEET 

Schenectady  Works,  Machine  Shop  No.  1 


PART. 

FRAMES 

RAILS. 

Pur.  Ord.;  Skttch: 
Pat.  or  Card  Dr.  No. 

OPERATION      "g 
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No.    Wanted.           is 

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tuu 


This  side  shows  1  record  as  ictually  kept 


Fig.  58.— Records  Showing  Output  of  Machines.  Adapted  from 
a  Paper  Given  by  H.  L.  Gantt,  "A  Graphical  Daily  Balance 
in  Manufacture,"  Transactions  American  Society  Mechanical 
Engineers,  vol.  xxiv,  pp.  1322-36,  Figs.  290,  291. 

have.  A  large  textile  establishment  once. introduced  a  num- 
ber of  costly  looms  which  were  guaranteed  to  turn  out  a  cer- 
tain quantity  of  cloth  within  a  given  period.  In  testing  the 
looms  it  was  found  that  they  made  the  output  with  little 


312    THE  PRINCIPLES  OF  .INDUSTRIAL  MANAGEMENT 

apparent  effort,  but  when  it  came  to  examining  the  output 
records  of  the  departments,  it  was  found  that  the  looms  were 
not  nearly  so  efficient  as  they  were  expected  to  be.  It  was 
found  on  investigation  that  the  loss  in  output  was  due  to  lost 
time  taken  in  repairing  and  looking  after  the  machinery. 
The  manager  then  kept  a  record  of  the  amount  of  repairs  and 
of  lost  time  on  the  looms,  and  found  to  his  amazement  that 
they  were  not  nearly  so  efficient  as  the  ones  that  had  been 
discarded.  Upon  further  investigation  he  found  that  the 
operators  were  unfamiliar  with  the  electrical  starting  devices, 
and  through  their  ignorance  were  causing  the  firm  a  loss  of 
hundreds  of  dollars.  Many  concerns  keep  records  of  this 
type  for  every  machine  in  their  plant,  and  they  find  the 
records  are  helpful  in  determining  what  machines  are  best 
suited  to  their  purposes,  as  well  as  being  useful  in  determi- 
ning the  repair  and  depreciation  charges.      (See  Fig.  59.) 

Within  recent  years,  some  important  textile  concerns 
have  adopted  an  effective  inventory  scheme.  A  plan  is  made 
of  every  department  of  the  establishment,  and  on  it  is  indi- 
cated every  machine  or  piece  of  equipment  within  the  sec- 
tion of  the  plant  represented.  All  pieces  in  the  department 
are  numbered,  no  matter  how  small,  and  are  shown  in  the 
drawing.  (See  Fig.  60. )  In  addition  a  separate  record  is 
kept  containing  an  accurate  description  of  the  machines,  and 
also  information  relating  to  their  prices,  dates  of  purchases, 
rates  of  depreciation,  from  whom  purchased,  by  what  power 
driven,  when  and  how  disposed  of,  and  the  amount  realized 
on  their  disposal.      (See  Fig.  69. ) 

The  drawings  alone  present  considerable  information. 
They  show  the  dimensions  of  the  plant  or  department)  and 
indicate  the  exact  position  of  every  piece  of  equipment,  while 
on  the  same  sheet  with  the  drawing  is  tabulated  a  brief  de- 
scription of  the  machines,  the  number  of  each,  the  methods 
of  driving  them,  and  a  description  of  the  motive  power.  A 
more  detailed  statement  of  these  items  is  entered  on  type- 


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314    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

written  sheets,  which  give  full  descriptions  of  the  inventory. 
Whenever  a  change  is  made  in  the  equipment,  the  drawing 
is  altered,  the  table  is  corrected  to  correspond  with  the 
change,  and  the  descriptive  part  of  the  record  is  corrected 
in  order  to  give  accurate  indication  of  the  new  conditions 
within  the  plant. 

Accuracy  and  fairness  in  keeping  these  inventory  records 
are  essential.  Insurance  companies  prefer,  at  times  may 
even  insist,  that  they  be  kept  by  disinterested  appraising 
firms  in  order  to. guarantee  absolute  trustworthiness.  It  is 
not,  however,  an  imperative  necessity  for  an  outsider  to  keep 
such  records ;  because  fallacies  may  be  detected  from  internal 
evidence.  Save  in  unusual  cases,  machinery  is  acquired  by 
purchase,  a  bill  of  sale  is  always  given  with  such  transac- 
tions, and  the  machine-manufacturing  companies  keep  their 
sales  records.  In  case  of  any  dispute  the  insurance  com- 
panies can  refer  to  these  records;  and  thus,  by  making 
proper  depreciation  allowances,  obtain  a  close  approximation 
of  the  value  of  the  machinery  from  an  independent  source. 

This  inventory  record  possesses  a  number  of  advantages. 
Aside  from  its  importance  in  case  of  fire,  it  keeps  the  firm 
thoroughly  informed  as  to  the  exact  status  of  all  its  posses- 
sions within  the  plant.  The  true  value  of  the  equipment, 
both  in  total  and  in  individual  items,  is  never  obscured. 
Even  if.  the  records  are  not  accurately  kept  they  serve  as  a 
convenient  basis  for  tracing  out  the  original  value.  It  fre- 
quently happens  that  the  assured  will,  unless  he  possesses 
such  a  record,  be  unable  after  a  fire  to  tell  just  what  his 
losses  are.  Many  times  he  o\'^erlooks  important  items  in  his 
loss  statements  to  the  insurance  companies,,  and  does  not 
recover  amounts  to  which  he-  is  justly  entitled.  Insurance 
companies  feel  quite  justified  in  paring  down  claims  when- 
ever their  validity  is  in  any  doubt,  and  there  are  often  pos- 
sibilities for  disagreement  where  no  such  record  is  kept. 
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816    THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT 

made  without  friction,  and  always  at  the  expenditure  of  con- 
siderable sums  of  money.  These  sums  far  exceed  the  cost  of 
installing  a  proper  fire  inventory  system,  while  the  after- 
expenditures  are  never  satisfactory. 

If  fire  never  occurs  in  the  plant,  the  additional  work  re- 
quired to  keep  this  type  of  inventory  is  so  small  compared 
with  the  advantages  gained  by  having  a  chart  of  the  equip- 
ment constantly  in  view  that  it  is  well  worth  the  trouble  to 
have  it,  if  only  to  help  keep  the  other  records,  as  shown  in 
Fig.  59,  which  refers  to  output  and  repairs  on  machines. 
The  plat  record  shows  at  a  glance  all  the  things  that  the  firm 
owns,  while  the  other  figure  gives  the  details  of  each  individ- 
ual item.     It  is  an  ideal  inventory  record  for  machinery. 


INDEX 


Ability,  individual,  212,  213. 
Alabama,  iron  and  steel  products 

of,  9. 
Alleghany  River,  steel  plants  on, 

14. 
American  Tobacco  Co.,  62-66. 
Apprenticeship  systems,  208-211. 
Artificial  light,  155. 
Automatic  records,  307-310. 

sprinkler,  145,   147. 

stoker,  174,  175, 

Baldwin  Locomotive  Works,  ap- 
prenticeship   system    of, 
208-210. 
locations  of,  24,  25. 

Banking  facilities,  26,  33. 

Beef  packing,  66-68,  109-114. 

Belts,  power  distribution  by,  177, 
178. 

Bin,  double,  268. 
single,  268. 

Boiler   division   of   a   ship-build- 
ing plant,  126,  127. 

Bonus,  as  labor  reward,  229,  230. 
cash,  47,  229,  230. 

Boston,  as  an  oil  port,  59. 

Bristol  recording  cards,  307,  309. 

Budget    system   record   of   mate- 
rials, 276,  277. 

Building,  free,  for  factory  loca- 
tion, 46. 


Buildings,  arrangement  and  con- 
struction of,  26,  28,  33, 
90,  96,  104,  106,  109, 
118,  123,  132,  134,  153, 
162, 
fire  protection  of,  140-152. 

Bush  Terminal  Co.,  144. 

Buying,    location    influenced    by 
facilities  for,  26, 

By-products,     industry,     66,    67, 
84,-85,  86,  101,  109-114. 

Carnegie     Steel     Company,     12, 

29. 
Cash  bonus,  47, 
Child  labor,  199-201. 
Clock,  recording,  242. 
Combustion,  direct,  166. 

indirect,  168. 
Concentration,  49-70. 
Concrete,  reinforced,  145. 
Condenser,  169,  175,  176. 
Connecticut,  as  producer  of  small 

articles,  8. 
Consolidations,  51. 
Contract  record  slip,  247-249. 

wage  payment,  219. 
Cotton,  15,  17. 
Credit,  facilities  for,  26,  33. 
Crosby-Fiske  "  Handbook  of  Fire 

Protection,"  137,  140,  146, 

149. 


317 


318 


INDEX 


Daily  time  card,  247. 

Day  wage  payment,  215-218. 

Decimal  system,  Dewey,  303-305. 

Department,   fire,   36-38. 

Dewey  decimal  system,   303-305. 

Direct    combustion    gas    engine, 

165,  166. 
Distribution,  4. 
Districts,  industrial  selection  of, 

5. 
Drawings,  294. 
Drop-box  system  of  time-keeping, 

241. 

Economizer  system,  174. 
Efficiency,  determination  of,  240- 

261. 
Electricity,     p'ower     distribution 

by,  178,  179. 
Emerson   diflferential   wage  pay- 
ment system,  228,  229. 
Employee,  qualities  of,  239. 
Employment,     bureau     of,     235, 

256. 
Engine,  gas,  166-168. 
hydraulic,  164. 
indirect  combustion,  168. 
reciprocating,  168. 
steam,  168. 
turbine,  168,  169. 
Engineering  Experiment  Station, 
University  of  Illinois,  303. 
Engines,  75,  127-169. 

building  of.  75,  127-131. 
Environment,  economic,  3. 
Equipment  of  plant,  3,  82,  294- 

316. 
Expansion    space,    influence    of, 
_  ...y    ^    on  plant  location,  26,  33. 

'■■    ifi- 

Female  labor,  196-199. 

Finished  goods,  281,  291-293. 


Fire  alarms,  37,  150. 
auxiliaries,  37. 
causes  of,  137-140. 
departments,    influence    and 

value  of,  36,  37. 
escapes,  152. 
hazards,  137,  138. 
powers,   139. 
precaution,    influence   of,    135- 

152. 
protection    of    buildings,    140- 
146. 
Fire-fighting,    facilities    for,    26, 

36-38. 
Fire    Underwriters'     Association 

of  United  States,  147. 
Flour  milling,  107,  140. 

Gallery    type    of    shop-building, 

130-133,  154. 
Gantt    bonus     system     of    labor 

reward,  229,  230. 
Gary,  steel  plant  at,  14,  29,  41, 

56,  95. 
Gas  engine,  166-168. 

manufacture  of,  136. 
General  Electric  Company,  208. 
Goods,    finished    and   unfinished, 

281-293. 
Gravity  tanks,  147. 

Halsey    premium    wage    system, 

219-225. 
Hazards,  fire,  137,  138. 
Heat  as  a  comfort  for  workers, 

153. 
Heating,  methods  of,  155-158. 
Hull  division  of  a  ship-building 

plant,  125,  126. 
Hydraulic  engine,  164. 
machinery,  164. 
pressure,  179,  180, 


INDEX 


319 


Illinois,    first    in    production    of 

six  articles,  8. 
Inboard  time  system,  240,  241. 
Index  record,  264,  265,  273. 
Industrial  selection  of  districts,  5. 
theory  of  location,  3-23. 
United  States,  5-9. 
Industries,    analytical,    84,    101- 
114. 
assembling,  83,  115-134. 
by-product,   84,   85,    101,   109- 

114. 
continuous,  83. 
direct-producing,  116. 
distribution  of,  8-23. 
indirect  producing,  116. 
non-by-product,  84-91,  101. 
synthetical,  83-100. 
Insurance,  rates  of,  26,  36-38. 
Integration,  49-70. 
Interchangeable  part,  79. 
Inventories,  perpetual,  268-270. 
single     versus     double     bin 
plan  of,  268. 
Inventory  of  properties  of  U.  S. 

Steel  Corporation,  52-56. 
Iron  production  in  Alabama,  9. 
in  Pennsylvania,  8. 

Jacksonville  as  an  oil  port,  59. 

Knowledge,  accurate,  as  basis  of 
judgment,  235. 

Labor,   bonus    reward   for,    229, 
330. 

child,  199-201. 

comparison    of    male    and    fe- 
male, 196-199. 

employment   bureau   for,    235, 
256. 

in  manufacturing,  14,  15,  26. 

problem  in  plant  management, 
4. 

23 


Laborers,  classes  of,  196-213. 
highly  skilled,  205-207. 
semi-skilled,  207. 
unskilled,  201,  202. 
Lackawanna  Steel  Company,  12. 
Land,  free,  45. 
Lasts,  298. 
Layouts,  plant,  83-100. 

influence   of .  fire   precaution 
on,  135-152. 
Legal  requirements,  influence  of, 
on  manufacturing,  25,  35. 
Lighting,   153-155. 
Localization,    causes    for    indus- 
trial, 10,  11. 
Location,  24-44. 
city,  41-43. 
country,  39-41. 
industrial  theory  of,  3-23. 
influence  of  market  on,  26. 
restrictive  ordinances  and,  26, 

35. 
suburban,  43,  44. 
taxes  and,  26,  35. 
Locomotive,  building  of,  75,  127- 
131. 

Machine  shop  structure,  128-132. 
Machinery,  arrangement  of,  306. 
hydraulic,  164. 

influence  of,  on  steel  industry, 
14. 
Machines,  classified  according  to 

laborers,  203-205. 
Managers,  duties  of,  183. 
Manufacture,    daily    balance    in, 

310. 
Manufacturing  for  general  stock, 
282-293. 
for  specific  contract,  282-293. 
influence  of,  on  plant  location, 

26,  29. 
steel,  14, 


320 


INDEX. 


Manufacturing,  textile,  15. 

toy,  80. 
Mains,  high-pressure,  37. 
Male  labor,  196. 

Markets,  influence  of,  on  indus- 
trial location,  10,  11. 
Marquette,  Michigan,  iron  ore  in, 

12. 
Massachusetts,  shoes  and  textiles 

in,  8. 
Materials,  direct,  262. 
indirect,  262. 
raw,  4,  12-21,  262-280. 
Meat-packing,  66-68,  109-114. 
Mill,  structure  of,  107,  108,  140. 
Minneapolis,  flour  manufactures 

in,  22. 
Minnesota,  flour  production  of,  9. 
Monongahela   River,  plant  loca- 
tion on,  14,  29. 
Montana,  raw  wool  in,  9. 
Motors,  group,  178. 

individual,  178,  179. 
Multiple  part  tag,  249-252. 

National  Biscuit  Company,  68. 

National  Fire  Protective  Associ- 
ation, 145,  149. 

New  Jersey,  dyeing  and  silk 
manufacturing  in,  8. 

New  London  as  an  oil  port,  59. 

New  York,  first  in  production  of 
29  articles,  8. 

Non-production  order  tag,  249, 
250. 

North  Carolina,  textiles  in,  9. 

Ohio,  first  in  production  of  3 
articles,  8. 

Oil   products,   records  of  manu- 
factured, 282-291. 
refining  of,  135,  136. 


Order,  production,  283. 
Ordinances,  restrictive,  and  loca- 
tion, 26,  35. 
Organization,  departmental,  192- 
195,  283. 

functional,  188-192. 

military,  183-187. 

types  of,  183-195. 
Outboard  time  system,  240,  241. 
Output,  record  of,  307. 

Packing,  meat,  66-68,  109-114. 

Pattern,  shop,  127. 

Patterns,     storage     arrangement 

for,  298-303. 
Pennsylvania,    carpet    and    iron 

manufacturing  in,  8,  9. 
Philadelphia,  as  an  iron  and  steel 
distribution  center,  11. 
as  a  textile  center,  24. 
high-pressure     mains     in,     37, 
38. 
Pianos,  making  of,  116,  117. 
Pipe  lines,  5. 

Pittsburg,  importance  of,  11,  12. 
relative  decline  of,  in  steel  pro- 
duction, 13,  92. 
Plans,  filing  of,  306. 
Plant,  by-product,  66. 
equipment  of,  81. 
ideal  situation  for,  39-48. 
inventory  record  of,  312,  315, 

316. 
layout  of,  83-100. 
efi'ect  of  fire  precaution  on, 
135-152. 
location  of,  24-38. 
records  of,  316. 
ship-building,   124-134. 
boiler  division  of,  126. 
hull  division  of,  125,  126. 
structure  of,  140-150. 


INDEX 


321 


Portland,   59. 
Power,  4. 

distribution   of,   by    air    pres- 
sure, 179. 
by  belts,  177. 
by  electricity,  178. 
by   hydraulic   pressure,   179, 

180. 
by  steam  pipes,  177. 
fires  caused  by,  139. 
gas  as  a  source  of,  166. 
importance  of,  in  all  manufac- 
turing, 163. 
in  steel  manufacturing,  14. 
motive,   division   of    shipyard, 

127. 
records  of,  307. 
-water,  163-165. 
Premium    plan    for    wage    pay- 
ment, 219,  223-225. 
Pressure,  air,  179. 
high,  mains,  37. 
hydraulic,  179,  180. 
tanks,    148. 
Production  order,  283. 

tag,  244,  252. 
Profit  sharing,  219,  220. 
Providence  as  an  oil  port,  59. 
Purchasing    department,    263, 

264. 
Purifiers,  water,  170. 

Questions  to  be  asked  of  a  for- 
mer employer,  237,  238. 
to   be   asked  of   a  prospective 
employee,  235. 

Eaw  materials,  4. 

as    factor    in    determination 

of  location,  12-21. 
budget    plan    of    recording, 

276,  277, 


Raw    materials,    inventories    of, 
268-270. 
purchasing    department   for, 

263.   ■ 
record  of,  262-280. 
Receiving  department,  266-268. 
Record,  automatic  graphic,  310. 
equipment  for,  299. 
of     finished     and     unfinished 

goods,  281-293. 
of  machines,  306. 
of  patterns,  301-303. 
of  plans,  306. 
of  tools,  294-299. 
oil  product,  282-291. 
output,  307. 

perpetual  inventory,  268-270. 
power,  307. 
spoiled   work,   255,   256,  258- 

261. 
tag  of  stores,  268. 
temperature,  307. 
voucher,  273-276. 
workers,  233-261. 
Recording  clock,  242. 
Refineries,  oil,  135-291. 

sugar,  102-105. 
Rent,   influence   of,   on   location, 

26,  35. 
Repair  shops,  influence  of,  on  lo- 
cation, 26,  32. 
Requisition  plan  for  store  record, 

274-276. 
Reward,  labor,  bonus  system  of, 

229,  230. 
Rhode   Island,   rank  of,  in  pro- 
duction, 5. 
silverware  production  of,  8. 
Richmond,  as  an  oil  port,  59. 
Robert  Gair  Co.,  144. 
Rowan    wage-payment   system, 
223-225. 


322 


INDEX 


Savannah  as  an  oil  port,  59. 
Saw-tooth  plan  of  lighting,  154. 
Schuylkill  Valley,  iron  and  steel 

in,  12. 
Selling,  3,  26. 

Ship-building,  plant  for,  124-134, 
Shipping  department,  291. 
Shipyard,  motive  power  division 

of,  127,  128. 
Shoe     manufacturing,      119-122, 
287,  298. 
building  for,  123,  124. 
building  required  for,  in  Mas- 
sachusetts, 8. 
Shop,   gallery   type   of,   130-133, 
154. 
machine,   128. 
Shops,  repair,  26,  32. 
Silk,  manufacturing  of,  18. 
Singer  Manufacturing  Co.,  68. 
Skylights,  154. 
Softeners,  water,  170. 
South    Carolina,    textile   produc- 
tion in,  9. 
Southern    states,    manufacturing 

development  of,  20. 
Space,  adequate  for  workers,  153, 

159. 
Specialization,  4,  71-80. 
Sprinkler,  automatic,  145,  146. 
Standard  Oil  Co.,  58-61. 
Standardizing    department,    263, 

264. 
Steam,  comparison  of,  with  gas 
as  power,  168. 
economy  of  plant,  169-176. 
engine,  168. 

power  distribution  by,  177. 
turbines,  168. 
Steel,  new  plants,  14. 

plants,  as  affected  by  source  of 
raw  materials,  12. 


Steel,  growth  of,  14. 

influenced  by  labor,  14. 
influenced  by  market,  12. 
production  in  Alabama,  9. 
Steel  manufacture,  building  for, 
95. 
labor  problem  in,  14,  92-94, 
97. 
Stoker,  automatic,  174,  175. 
Store  room,  arrangement  of  ma- 
terial for,  272,  273. 
location  for,   131-133,  295. 
record  of  goods  in,  264-266. 
Stores,  thieving  of,  273. 
Sugar,  refining  of,  102-105. 
building  for,  105,  106. 
record     of     manufactured 
products  of,  283,  284. 
Superheater,  174. 

Tag  production  order,  244,  252. 
record  of  employees,  249-252. 
of  stores,  268. 
Tanks,  gravity,  147. 

pressure,  148. 
Taxes,  exemption  from,  46. 

influence    of,    on    location,   26, 
35. 
Taylor     differential     wage    pay- 
ment, 225-229. 
Temperature,  record  of,  307. 
Testing  department,  264. 
Textiles,   a  specialized  business, 
72. 
in    non-by-product    industries, 

91. 
labor  and,  15. 

location  of  plants  for,  18,  20. 
manufacturing  of,  86-89. 
plant  required  for,  89-91. 
production    of,    in    Massachu- 
setts, 8. 


INDEX 


323 


Textiles,  in  North  Carolina,  9. 
Thermostats,  150. 
Thieving,  store,  273. 
Time  record,  advantages  of,  242- 
244. 
book  method  of,  244-246. 
call  number  method  of,  241. 
clock  method  of,  242. 
drop-box  method  of,  241. 
outboard  form  of,  240. 
Toilet  rooms,  153-160. 
Tool  room,  management  of,  294- 

299. 
Tools,    proper    position   of,    131- 
133,  295. 
record  of,  294-299. 
Towne   profit-sharing   plan,    219, 

220. 
Toys,  manufacture  of,  80. 
Trussed  Concrete  Steel  Company, 

145. 
Turbines,  steam,  168. 

water,  164. 
Turner  Construction  Co.,  144. 

Underwriters',    Fire,   Association 

of  United  States,  147. 
Unfinished  goods,  281-291. 
Union  Railroad,  29. 
United  States,  industrial,  5-9. 
United  States  Steel  Corporation, 
29,  40,  52,  58,  69,  95. 
properties  of,  63-56. 

Ventilation,  153. 

methods  of,  157-159. 

state  law  concerning,  159. 
Voucher  record  plan,  273-276. 

Wage  payment,  214. 
contract  plan  of,  219. 
day  plan  of,  215-218. 


Wage    payment,     Emerson     dif- 
ferential    plan      of,     228, 
229. 
Gantt   bonus    system   of,   229- 

230. 
Halsey  premium  plan  of,  219, 

223. 
piece  plan  of,  216-219. 
profit-sharing  plan,  219,  220. 
Rowan  premium  plan  of,  223— 

225. 
Taylor     differential     plan     of, 

225-228. 
Taylor's  timing  system  of,  230- 
232. 
Wash  rooms,  153-160. 
Water  power,  163-165. 

influence   of,   on   location   of 
milling  industries,  22. 
purifiers,  170. 
softeners,  170. 
supply,  as  affecting  insurance, 

37. 
turbines,  164. 
Westinghouse  Electric  and  Man- 
ufacturing Co.,  210. 
Wilmington,  as  an  oil  port,  59. 
W"indows,  154. 

sawtooth,  154. 
Wool,  ten  leading   states  in  the 
production  of,  15. 
ten  leading  states  in  the  man- 
ufacture of,  16. 
Work,    spoiled,    record    of,    255, 

256,  258-261. 
Works,  Baldwin  Locomotive,  24, 

25. 
Workers,  record  of,  233-261. 
contract  slip,  247-249. 
daily  time  card,  247. 
tag  scheme,  249-252. 
time  book,  244-246. 


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